Belying hopes of recovery, India's economic growth rate is estimated to slip to a decade's low of 5 per cent in 2012-13, pulled down by poor performance of manufacturing, agriculture and services sectors.
Releasing the first official estimate of growth for the current financial year, the Central Statistical Organisation (CSO) said it would decline from 6.2 per cent in 2011-12 to 5 per cent, much lower than the projections of the Reserve Bank and other agencies.
Noting that the growth estimates, which are based on data for April-November, were below expectations, Finance Ministry said that it will continue efforts to revive economic growth and hoped that final figures would show better results.
"Since then, leading indicators have turned up, suggesting some hope that we will end the year on a better note. Also, sectors such as trade and transport, which are related to industry, would also tend to get revised upwards, if growth outcomes are better," the ministry said in a statement.
It further added: "We are keeping a watch on the situation. We have taken and will continue to take appropriate measures to revive growth."
Describing the growth numbers as astonishingly low, India Inc demanded that the government and the Reserve Bank should take all possible measures to arrest declining growth.
The previous low at 4 per cent was recorded in 2002-03.
Since then the Indian economy has been expanding at over 6 per cent, the highest rate being 9.6 per cent in 2006-07.
CSO's advance estimate lowered the growth in agriculture and allied activities to 1.8 per cent in 2012-13, compared to 3.6 per cent 2011-12. Manufacturing growth is also expected to drop to 1.9 per cent in this fiscal, from 2.7 per cent last year.
While the Reserve Bank has projected growth rate of 5.5 per cent for the current financial year, the International Monetary Fund (IMF) has pegged it at 5.4 per cent.
The Finance Ministry had earlier reduced the growth projection for the current fiscal to 5.7-5.9 per cent from the original estimate of 7.6 per cent.
With a view to promoting growth, the RBI in its quarterly policy review last month lowered the key lending rate by 0.25 per cent and reduced the Cash Reserve Ratio (CRR) by the same margin, releasing Rs 18,000 crore or primary liquidity into the system.
When asked about the possibility of further lowering of interest rate to boost growth, RBI Governor D Subbarao, who is in Guwahati for board