New Delhi: Reflecting a muted performance, the GDP growth slowed to 7 % in the April-June quarter, from 7.5 % in the previous quarter, amid deceleration in farm, services and manufacturing sectors.
A slower GDP growth, along with slower pace of industrial production expansion, however bolsters the case for a rate cut by the Reserve Bank.
The Gross Value Added (GVA), a new concept introduced by CSO to measure the economic activity, also slipped during the first quarter to 7.1 %, from 7.4 % a year ago.
The GDP grew at 7.5 % in the January-March quarter while it was 6.7 % in the April-June quarter last year, according to data from the Central Statistics Office (CSO).
The nominal GDP and GVA at current market price showed a steep decline in the quarter under review. The nominal GDP slipped to 8.8 % in Q1 from 13.4 % a year ago while the GVA growth rate nearly halved to 7.1 % from 14 % a year ago.
The government towards the beginning of the fiscal has projected a growth rate of 8.1-8.5 % in the current fiscal, which may be difficult to achieve.
RBI, which has cut interest rate by 0.75 % in three tranches since January, is scheduled to announce the next bi-monthly policy on September 29.
The data showed that the manufacturing sector GVA at constant prices (2011-12) rose 7.2 % in the April-June quarter as against 8.4 % in the year-ago period.
Similarly, the growth in the output of electricity, gas, water supply and other utility services decelerated sharply to 3.2 % as against 10.1 % a year earlier.
The farm and allied sectors grew at 1.9 %, down from 2.6 % in the previous year.
The output of mining and quarrying sector too slipped marginally to 4 %, from 4.3 % a year ago.
Financial, real estate and professional services growth shrank to 8.9 % as against 9.3 % a year earlier.
However, the construction activity registered an increase of 6.9 %, up from 6.5 % in the previous year.