Down from 9% in 2007-2008, India's economic growth is expected to slow to 7.1% in the current fiscal year, the Central Statistical Organization (CSO) said on Feb. 9. It would be the slowest growth rate since 2003.
The CSO said growth in manufacturing output was expected to be around 4.1%, half the 2007-08 figure, while agricultural output would expand 2.6%, down from 4.9%.
"The global scenario is turning gloomier by the day and export-oriented sectors are feeling the heat," said Dharma Kriti Joshi, principal economist at Crisil credit rating agency. The Indian government's stimulus packages and interest rate reductions should start having some effect from October onwards but "meanwhile we'll have a very tough time," he said.
Pranab Mukherjee, acting finance minister as well as foreign minister, pledged last week the government "will take further steps" to shield labor-intensive sectors from the downturn.
His words came days after data showed half a million workers lost their jobs in the three months to December and an export lobby group forecast the number would hit 1.5 million by end of this fiscal year as the global slump hits textile, jewellery and auto employees, among others.
Copyright Agence France-Presse, 2009