India’s economy grew a disappointing 5.5 percent in the last quarter ending June, marking a sharp slowdown from the 8 percent growth in the same period a year ago.
The economy grew only 5.3 percent in the previous quarter, signaling a sharp downturn from previously robust growth.
Economists say the dismal performance of the economy reflects the government’s disarray and inability to push through crucial reforms.
The economic figures for the April-June quarter released yesterday by the government showed that industrial and investment activity had failed to pick up pace while the services sector has marginally weakened.
Agriculture grew 2.9 percent compared with 3.7 percent a year ago, while the services sector declined to 6.9 percent compared with 10.2 percent.
The only bright notes in the gloomy quarterly figures were in the construction sector, which showed a robust 10.9 percent growth; and financing, insurance, real estate and business service activities, which expanded by 10.8 percent.
With a political impasse in India’s parliament holding up all government decision-making, and the central bank refusing to reduce interest rates, companies have shied away from investments.
C. Rangarajan, who heads the prime minister’s Economic Advisory Council, said the 5.5 percent figure was “consistent with the 6.7 percent growth we had projected.”
Industry leaders and economists said the figures were disappointing and reflected the deceleration on manufacturing and services.