News / Asia

    India’s Economic Growth Slips to 3-Year Low

    An Indian laborer carries a bag of potatoes at a warehouse in Jammu, India, July 31, 2012.
    An Indian laborer carries a bag of potatoes at a warehouse in Jammu, India, July 31, 2012.
    Anjana Pasricha
    NEW DELHI — Economic growth in India has slipped to a three-year low, confirming a sharp slowdown in Asia’s economy.
     
    The 5.5 percent economic growth from April to June was slightly higher than in the previous three months. But it brought no cheer to a country where the economy has stalled in recent months.

    Virtually all sectors such as manufacturing, services and agriculture posted slower growth compared to the same period last year, said Dharmakirti Joshi, chief economist at ratings agency CRISIL in Mumbai.   
     
    “The investment growth is close to zero, the private consumption has slowed down materially and if you look at exports, the external demand, that also is beginning to slow down,” Joshi said.
     
    While India has been affected by the global slowdown, economists say domestic factors are largely responsible for the plummeting growth.
     
    They say one of the main worries centers around persistently high inflation and high interest rates, which have hit consumption -- the main driver of India’s growth.  
    Another key concern is that economic reforms continue to be stalled due to a political impasse. The government, embroiled in a number of corruption scandals, has been on a collision course with opposition parties. As a result, key legislation, which could revive the economy, is stuck in a deadlocked parliament.     
     
    The policy paralysis has unnerved investors. In recent months, a number of domestic and foreign businesses have put investment plans on hold. The government admits restoring investor confidence could be key in determining how the economy fares.
     
    The Deputy Chairman of India’s Planning Commission, Montek Singh Ahluwalia, is optimistic and hopes for a rebound in coming months.  
     
    “A lot will depend really on what happens to the level of investment, both public sector investment and of course private investment," he said. "I think it is most likely in the second half of the year that investment intentions will begin to change.”   
     
    Taking note of the sagging economy, Prime Minister Manmohan Singh appointed a new finance minister a month ago, and there are hopes that he will take steps to address concerns of investors.  
     
    The government estimates that the economy will grow by 6.8 percent this fiscal year. But most analysts project much lower growth of around 5.5 percent.  
     
    That is a huge disappointment for a country which just a year ago, was hoping to hit double digit growth, and which has been widely described as an engine to revive the global economy.

    You May Like

    US Watching as North Korea Opens Biggest Political Meeting in Decades

    As Workers' Party Congress opens, Washington anticipating possibility of another missile launch or nuclear test as top officials gather

    Video Pop Icon Prince Quietly Helped Afghan Orphans for Years

    He sent thousands of dollars to help an aid group rebuild a training center for orphan boy and girl scouts in Kabul, but kept his involvement secret

    Britain’s Muslims See London Mayor Race as Victory

    Mere running of 45-year-old former government minister and son of Pakistani immigrants Sadiq Khan seen by many as turning point

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Mike from: California
    September 02, 2012 1:56 PM
    According to what I read in The Economist, India has the most stifling and bureaucratic government in the world. It takes years to get permits for building, months or years to get through the courts, and a rigid social structure designed to "keep people in their place." It is quite sad but it does work to the advantage of the ruling class to maintain a society of special privilege. But India does have oportunities and I hope it sees them.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Donations Rescue Afghan Parents, Children From Forced Labori
    X
    May 05, 2016 6:44 PM
    A Facebook campaign organized by a VOA radio host raised 150,000 Afghan rupees to rescue a family from forced labor at a brick kiln in Nangarhar province – the result of the father’s unpaid debt. Video by a VOA reporter in Jalalabad went viral this week and triggered the Facebook campaign.
    Video

    Video Donations Rescue Afghan Parents, Children From Forced Labor

    A Facebook campaign organized by a VOA radio host raised 150,000 Afghan rupees to rescue a family from forced labor at a brick kiln in Nangarhar province – the result of the father’s unpaid debt. Video by a VOA reporter in Jalalabad went viral this week and triggered the Facebook campaign.
    Video

    Video Kurdish Troops Recount Firefight Which Killed US Navy SEAL

    A U.S. Navy SEAL killed Tuesday, when Islamic State fighters punched through Kurdish lines in northern Iraq, was part of a quick reaction force sent to extract other U.S. troops trapped by the surprise offensive. VOA's Kawa Omar spoke with Kurdish troops in the town of Telskuf -- the scene of what U.S. officials called a "dynamic firefight."
    Video

    Video British Lawmakers Warn EU Exit Talks Could Last A Decade

    Leaving the European Union would mean difficult negotiations that could take years to complete, according to a bipartisan group of British lawmakers. While the group did not recommend a vote either way, the lawmakers noted trade deals between the EU and non-EU states take between four and nine years on average. Henry Ridgwell reports on the mounting debate over whether Britain should stay or exit the EU as the June vote approaches.
    Video

    Video NASA Astronauts Train for Commercial Space Flights

    Since the last Shuttle flight in 2011, the United States has been relying on Russian rockets to launch fresh crews to the International Space Station. But that may change in the next few years. NASA and several private space companies are developing advanced capsules capable of taking humans into low orbit and beyond. As VOA's George Putic reports, astronauts are already training for commercial spacecraft in flight simulators.
    Video

    Video US Worried Political Chaos in Iraq Will Hurt IS Fight

    The White House is expressing concern about rising political chaos in Iraq and the impact it could have on the fight against the Islamic State. The U.S. says Iraq needs a stable, central government to help push back the group. But some say Baghdad may not have a unified government any time soon. VOA's White House correspondent Mary Alice Salinas reports.
    Video

    Video Press Freedom in Myanmar Fragile, Limited

    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Taliban Threats Force Messi Fan to Leave Afghanistan

    A young Afghan boy, who recently received autographed shirts and a football from his soccer hero Lionel Messi, has fled his country due to safety concerns. He and his family are now taking refuge in neighboring Pakistan. VOA's Ayaz Gul reports from Islamabad.
    Video

    Video Major Rubbish Burning Experiment Captures Destructive Greenhouse Gases

    The world’s first test to capture environmentally harmful carbon dioxide gases from the fumes of burning rubbish took place recently in Oslo, Norway. The successful experiment at the city's main incinerator plant, showcased a method for capturing most of the carbon dioxide. VOA’s Deborah Block has more.
    Video

    Video EU Visa Block Threatens To Derail EU-Turkey Migrant Deal

    Turkish citizens could soon benefit from visa-free travel to Europe as part of the recent deal between the EU and Ankara to stem the flow of refugees. In return, Turkey has pledged to keep the migrants on Turkish soil and crack down on those who are smuggling them. Brussels is set to publish its latest progress report Wednesday — but as Henry Ridgwell reports from London, many EU lawmakers are threatening to veto the deal over human rights concerns.
    Video

    Video Tensions Rising Ahead of South China Sea Ruling

    As the Philippines awaits an international arbitration ruling on a challenge to China's claims to nearly all of the South China Sea, it is already becoming clear that regardless of which way the decision goes, the dispute is intensifying. VOA’s Bill Ide has more from Beijing.
    Video

    Video Painting Captures President Lincoln Assassination Aftermath

    A newly restored painting captures the moments following President Abraham Lincoln’s assassination in 1865. It was recently unveiled at Ford’s Theatre in Washington, where America’s 16th president was shot. It is the only known painting by an eyewitness that captures the horror of that fateful night. VOA’s Julie Taboh tells us more about the painting and what it took to restore it to its original condition.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.

    Special Report

    Adrift The Invisible African Diaspora