India’s economy slows to decade low of 5% in 2012-13; grows by 4.8% in Q4

31 May 2013 Evaluate

Much in-line with expectation, India’s economy grew 4.8% in the fourth quarter of 2012-13, better than the 4.5% growth in the previous three months, the lowest figure in fifteen quarters which was later revised to 4.7%. For the full year, the growth was 5%, the lowest in 10-years, but in-line with an official preliminary estimate given in February that pointed to decade low growth of 5%.

Mining sector continued to be a major concern with a contraction of 3.1% in the fourth quarter of the current fiscal year against 0.1% in the same period last year. Agriculture growth also declined to 1.4% in the last quarter compared to 2.0% y-o-y. While, construction and social, personal services also slowed down to 4.4% and 4% in this period against 5.1% and 6.8%, respectively.

However, the manufacturing sector, which has been a cause of concern lately, however, had a silver lining as it grew 2.6% during this quarter against 0.1% in fourth quarter of 2011-12. Additionally, trade, hotels, transport and communication’ grew to 6.2 percent in the fourth quarter while financing, insurance, real estate and business services grew 9.1%.

Showing an increase of 5%, GDP at factor cost at current prices in the year, is estimated at Rs 55,05, 437 crore, as against Rs 52, 43,582 crore in the last fiscal. Meanwhile, GDP at factor cost at constant (2004-05) prices in Q4 of 2012-13 was estimated at Rs 14,707.82 billion, as against Rs 14,037.27 billion in Q4 of 2011-12. Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 56,94,362 crore in 2012-13 as against Rs 50,56,219 crore in 2011-12. Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 11,86,761 crore in 2012-13 as against Rs 10,42,677 crore in 2011-12.

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 29,64,677 crore in 2012-13 as against Rs 27,49,072 crore in the previous fiscal. In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during 2012-13 are estimated at 29.6% and 33.2%, respectively, as against the corresponding rates of 30.6% and 33.7%, respectively in 2011-12.

Q4 GDP number is not a surprise and suggests only a cyclical and not a structural upturn and hence does not reflect any improvement in growth. A moderate recovery in Indian factories, exports and investments were perhaps the reason for an increase in overall growth in the quarter through March. Data showed year-over-year factory output grew in March, for the third month in a row, after contracting for the majority of last year, while capital goods output - a key barometer of investment - rose for a second straight month, albeit off a low base.

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Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
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SEBI Registration Number:	INA000013323 Validity - May 16, 2019 - Perpetual
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Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
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Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
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India’s economy slows to decade low of 5% in 2012-13; grows by 4.8% in Q4

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