The Reserve Bank of India, in its December monetary policy review, revised annual economic growth estimate down to just 5 per cent from 6.1 per cent predicted in the October policy. This comes close on the heels of GDP growth clocking just 4.5 per cent in the second quarter.
Going by what the indicators are showing so far, third quarter doesn’t hold any hopes of revival. A big alarm has already gone off — core sector growth declined further to (-)5.8 per cent for the month of October from (-)5.2 per cent in September. Vehicle sales, one of the most important markers, saw a slight uptick in October only to be followed by weak numbers in the very next month. Other indicators also appear far from encouraging. Manufacturing PMI dropped to 50.6 in October from 51.4 in September.