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Economy to grow at 6.9% in 2011-12: Govt

India's agriculture and allied activities are expected to grow 2.5%, while manufacturing sector is seen growing an estimated 3.9% in the current fiscal year that ends in March.

business Updated: Feb 07, 2012 17:04 IST

The economic growth is likely to fall to a three-year low of 6.9% in 2011-12, mainly due to sharp slowdown in manufacturing, agriculture and mining sectors, against 8.4% expansion in the last fiscal.

Agriculture and allied activities are likely to grow at 2.5% in 2011-12, compared to a robust growth of 7% in 2010-11, according to the advanced estimates released on Tuesday by the central statistical organisation (CSO).

Manufacturing growth is also expected to drop down to 3.9 % in this fiscal from 7.6% last year.

The CSO's GDP growth projection is a tad lower than the 7% forecast made by the Reserve Bank of India in its quarterly monetary policy review last month.

In its mid-year Economic Review, the government had also pegged growth at around 7.5%. The current estimate is a sharply lower than the 9% growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.

The latest GDP growth estimate of 6.9% for the entire fiscal means that the pace of economic expansion slowed in the second half of 2011-12, given that GDP growth in the April-September, 2011, period stood at 7.3%.

According to the advance estimates, mining and quarrying is likely to witness a decline of 2.2%, compared to a growth of 5% a year ago.

Growth in construction is also likely to slip to 4.8% in 2011-12, against an 8 % in 2010-11.

Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1 % this fiscal, against 10.4% last fiscal.

First Published: Feb 07, 2012 11:25 IST