India’s economic activity slowed to 4. 4% in the December quarter as manufacturing activity was seen to be sluggish, although the government remained hopeful of meeting the 7% growth estimate for the current financial year. The economy increased by 6. 3% during the second quarter of current financial year and 5. 2% in the December quarter of 2021.
The latest numbers released by the National Statistical Office also revised upwards the growth for 2021-22 to 9. 1%, against 8. 7%, which was attributed as one of the reasons for the moderation in the third quarter of the current fiscal year.
A part from the base effect, sectoral data based on gross value added estimated that the manufacturing sector shrank 1.1% during the third quarter, although a little better than the 3.6% contraction estimated for the July-September period. Chief economist at Bank of Baroda, Madan Sabnavis said “The major disappointment is negative growth in manufacturing, which can be attributed to weak profit and loss of accounts of this sector. The second-quarter results did indicate a fall in profits due to high input costs.”