GDP growth rate, which is considered as a barometer of economy
snapped its 4-quarter downtrend and rose to 5.5% in the
first quarter of the current financial year.
However this figure is in sharp contrast to the
GDP growth rate in the first quarter of the previous financial year,
which was around 8 %.
Faltering manufacturing sector owing to high interest rates
pulled down the growth rate.
RBI with its first priority being the inflation-control is
hesitating from cutting the policy rates. Though core inflation has been tamed
but the headline inflation continues to haunt
the Indian economy. RBI governor had already raised
the concern for the poor people who are being tormented by the rising inflationin India.
Manufacturing sector growth staggering around .2 % was the main
culprit for the poor GDP growth.
Deficient monsoon too played the spoil-sport and dragged down
the agriculture sector growth rate by around 1% to 2.9% in the year-ago
period.
One thing is clear; Slowing of the economy is due to failure of the
fiscal policy and can't be corrected beyond a limit by taking
monetary measures.
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