- Friday, April 19, 2024
By: Radhakrishna N S
INDIA’S economy slowed further in the latest quarter, official data showed yesterday (28), as the world’s largest democracy prepares for a national election and clashes with Pakistan at the border.
GDP growth in Asia’s third-largest economy reduced to 6.6 per cent in the third quarter, a consecutive slump from 7.1 per cent in the three months to the end of September.
The numbers bode ill for Prime Minister Narendra Modi, who steamrolled to power in 2014 promising to create millions of jobs and spur economic growth but must call a general election by May.
“Numbers are disappointing and show growth trajectory slowing down and Modi government cannot do anything between now and elections,” Ashutosh Datar, an independent economist said.
The figures were blamed on weaker consumer spending and a slowdown in investment.
The Central Statistics Office also revised down its growth forecasts for the fiscal year ending March to 7 per cent from an earlier projection of 7.2 per cent.
Analysts say India needs to regularly record growth rates of at least eight per cent to create jobs for millions of Indians entering the workforce every year.
Unofficial figures leaked from the statistics ministry earlier this year showed India’s unemployment rate at a 45-year high of 6.1 per cent.
The dampened numbers also comes as New Delhi and Islamabad lock horns in an military crisis that analysts say could spook foreign investors from making much-needed investments in India.
“Foreign investors may stay away from India depending on weak growth and ongoing security issues,” Sujan Hajra, economist with Mumbai-based Anand Rathi securities said.
Experts say more interest rate cuts are needed.
The bank cut rates in February to 6.25 percent but experts say more reductions are in the offing.
“There will be clamour for more rate cuts and we may even see RBI cutting the rates by 50 basis points to boost growth,” Hajra says.
(AFP)
