Q2 growth slowdown: What they said

Following are some of thecomments of policy-makers, India Inc. and economists on the Indian economygrowing at the slowest pace in over two years at 6.9 per cent in the quarterended September:

Pranab Mukherjee, Finance Minister: Had it been 10 yearsago, this would have elated me, but today I cannot have that satisfactionbecause we reached the higher trajectory of growth, from there we are slipping.

Montek Singh Ahluwalia, Deputy Chairman of the PlanningCommission: My expectation is that it (GDP growth) may end up being about thesame in third quarter (October-December) and perhaps in the fourth quarter itwill improve. The growth rate is going to be between 7-7.5 percent this fiscal.

Chandrajit Banerjee, director general, Confederation ofIndian Industry (CII): A significant pull-down in investments is apparent andthis can take the overall economy down further, since there are very fewdevelopments in the country which can be termed as confidence boosters. In suchsituations, the importance of sentiments cannot be overemphasized.

Rajiv Kumar, secretary general, Federation of IndianChambers of Commerce and Industry (FICCI): FICCI estimates that the GDP growthin the current fiscal will now be in the range of 7-7.1 percent withsignificant downside risks. In fact, given that the first half growth rate hasbeen 7.3 percent, it is now amply clear that even the 7.6 per cent forecast bythe Reserve Bank of India (RBI) for 2011-12 is clearly on the higher side.

Arun Singh, senior economist, Dun and Bradstreet India: Thisslow-down is majorly due to high inflation, interest rates, uncertainty inglobal economy, policy and reforms paralysis. The declining in the miningsector is a major concern which can lead to increase in input costs for manycompanies. RBI is in a policy dilemma, as increase in interest rates has notled to major decline in inflation and now the growth rate is also beingaffected due to it.

D.S. Rawat, secretary general, Assocham: The RBI shouldstart cutting bank interest rates so that cost of credit comes down. Due tonear double-digit inflation, the cost of raw materials has shot up, resultingin slow-down in factories' output.