New Delhi, Nov 30 (IANS) India's economy grew at a sluggish rate of 5.3 percent in the July-September quarter from a year earlier, government data on the gross domestic product (GDP) Friday showed.
The data, analysts said, underlined the need for financial reforms, speedier clearance of infrastructure projects among other steps to revive the economy.
Finance Minister P. Chidambaram termed the sluggish growth rate as "below expectations" and asked the Reserve Bank of India to cut interest rates, saying its tight money policy was pulling the economy down.
"The growth rate for the first half (H1) of the current financial year works out to 5.4 percent as against 7.3 percent in the H1 of 2011-12. Overall, the growth rate is below our expectations," Chidambaram said in a statement.
The second quarter growth figure is lower than the 5.5 percent registered during the first three months of the 2012-13 fiscal that ended June 30.
In the second quarter of 2011-12, the country had posted a 6.7 percent growth.
Industry associations said the numbers confirmed that economic activity continued to remain sluggish and unless the growth performance in the second half improved considerably, the country would have to settle for a sub-6 per cent growth this year.
"It is essential that the reform agenda is carried forward with vigour and that the recently announced measures are implemented," said R.V. Kanoria, president of FICCI.
The sluggish growth in the second quarter was mainly on account of a mere 0.2 percent growth in the manufacturing sector, against 3.4 percent in the corresponding quarter the previous fiscal.
The farm sector growth dropped from to 3.1 percent to 1.2 percent.
According to Chidambaram, the slowdown in farm output was due to untimely rains in June-July period which has effected the khariff crop.
"The reduction in growth in agriculture and allied sectors has been on account of rainfall being lower than normal particularly in June-July," he added.
"The impact on the khariff crop has pulled down the growth rate."
Similarly, the electricity sector's growth slumped from 10.5 percent in the second quarter of 2011-12 to 2.8 percent, according to data released by the Central Statistical Organisation (CSO).
However, mining and quarrying sectors showed improvement, with a growth of 1.9 percent from a decline of 5.4 percent in the corresponding quarter last year.
The construction sector grew by 6.7 percent from 6.3 percent posted in the second quarter of 2011-12.
India's GDP growth slumped to 6.5 percent in 2011-12, even lower than the 6.7 percent level achieved during the global financial crisis of 2008-09.
The economy had expanded by 8.4 percent in 2010-11.
India's GDP at factor cost at constant (2004-05) prices is estimated at Rs.12,93,922 crore in the second quarter of 2012-13, compared to Rs.12,28,982 crore during the corresponding period last year, showing a growth rate of 5.3 percent, the CSO data showed.