Q2 GDP slumps; Oct core sector rebound offers hope

The Indian economy grew 5.3 per cent in the quarter ending September 2012, lower than the 5.5 per growth in gross domestic product (GDP) clocked in the first quarter, with both the farm and manufacturing sectors recording a deceleration. GDP growth in the first six month of the current fiscal was recorded at 5.4 per cent, sharply lower than the 5.8 per cent growth rate projected by the RBI for the entire year, according to data released by the Central Statistical Organisation on Friday.

Finance minister P Chidambaram termed the data, which was way below the 6.7 per cent clocked in the second quarter of 2011-12, as “below expectations”. What this means is to achieve the RBI’s projection of a 5.8 per cent growth for the entire year, the economy would have to show a strong rebound and grow by 6.2 per cent in the second half of the fiscal.

“The growth rate for the first half (H1) of the current financial year works out to 5.4 per cent as against 7.3 per cent in the H1 of 2011-12. Overall, the growth rate is below our expectations,” the finance ministry said in a statement, blaming the below normal rains in June and July for lower farm growth and poor manufacturing performance for low growth in industry.

During the three-month period ended September 30, the manufacturing sector

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