Is India's GDP a Gasping Elephant or a Tortoise?

Bangalore: The March quarter results indicate the slow growth rate of 5.3 percent which is the slowest in the past nine years. Prime Minister Manmohan Singh has set up an investment Tracking System to ensure that the projects are completed. India’s Central bank warned that the economic growth might further fall. This growth in the GDP is high by the standards of developed countries but is a disappointment in once booming India.

Robert Prior-Wandesforde a senior economist at Credit Suisse said in an investors note, “It is hard to describe India’s March quarter GDP release as anything other than shocking” and he was sure that the figures would bring “shivers down the spines” of the politicians who would then pressure the RBI to further  cut down the key lending rates. This view is shared by other economists as well like Samiran Chakraborty, head of the regional research at Standard Chartered told Bloomberg, “We can’t rule out the possibility of India facing a deeper slowdown in the absence of quicker economic reforms, when the central bank has limited room to cut rates.”

In an official statement from the Prime Minister’s Office it was said, “Major projects will be specially tracked to take them forward on a fast track in order to provide a fresh impetus to the economy. This was in the context of delays faced by projects on multiple fronts – security clearances, environmental clearances, other clearances, land related matters.” This issue was raised at the PM’s Council on Trade and Industry last year to ask the Prime Minister to create a system to track the major projects. To ease the concerns of the investors there was the arrival of the figures that revealed the Indian economy growth of 6.5 percent in 2011-2012.