The economy grew at just 4.7 per cent for the quarter ending December 2013, as shrinking manufacturing output weighed heavily on the GDP. Analysts and economists had expected the Q3 GDP to come in at around 4.9 per cent.
It may now be difficult for the economy to achieve 4.9 per cent GDP expansion in 2013-14.
Growth in the key infrastructure sector slowed to 1.6 per cent in January from 8.3 per cent in the same month a year ago due to poor output of coal, petroleum refinery products and natural gas, adding to the concerns of industry. Worried over 1.9 per cent contraction in the output of the manufacturing sector, India Inc stepped up its demand for a rate cut by the Reserve Bank of India (RBI) to boost demand and spur growth.
The manufacturing sector had grown 2.5 per cent a year ago, according to official data released here by the Central Statistics Office (CSO). The manufacturing output contracted 0.7 per cent for the first nine months of the financial year. The country's gross domestic product (GDP) had expanded 4.8 per cent in the July-September quarter and 4.4 per cent in April-June. Growth in the first nine months (April-December) was 4.6 per cent. The economy must expand by 5.7 per cent in January- March to achieve estimated GDP expansion of 4.9 per cent in 2013-14.
The Reserve Bank of India, which has been hiking interest rates, would now have to consider effective steps, including a cut in interest rates as growth continues to be absymally low.
With inputs from PTI