The Central Statistical Organisation had recently projected GDP for 2011-12 at 6.9% and to now achieve that figure GDP for the fourth quarter would have to see a remarkable resurgence.
Mining sector as expected disappointed with -3.1% vs -2.9% Year-on-year. The sector has been plagued with numerous problems, including a ban on mining in certain areas.
The agriculture sector grew 3.1%. while the services sector grew at 8.9% vs 7.7% year-on-year. In fact, India's GDP growth has largely been dependent on the services sector. Gross Fixed capital formation has come in -1.2% year-on-year.
All eyes will now be focused on the Reserve Bank of India considering that GDP data has been disappointing.
Industry will continue to hanker for lower interest rates especially on the account of the lower than expected gross fixed capital formation. Markets reacted negatively dragging indices significantly lower after the data was released.