The much talked  about ‘policy paralysis’ is now taking its toll on the country as the Gross Domestic Product (GDP) grew at a mere 5.3 percent in the January-March (fourth quarter of the financial year). The growth is lowest since 2003. It was during the NDA regime that the country’s GDP clocked at 3.6 percent in the January-March quarter of 2003. 

Last year, India grew at 7.8 percent in the same quarter.

“There is a total mismanagement of economy by the government,” professor Christopher Lingle, an American economist, told Governance Now.

“If the government had wanted to do it or planned to do it, they could not have done a better job… The way to balance the current account deficit is by bringing in foreign investments. India needs to expand its physical infrastructure. That’s not happening,” he added.

During the third quarter (September to December 2011), India grew at 6.1 percent. The reason behind the slow growth in the fourth quarter was because the manufacturing sector contracted to 5.3 percent while agricultural growth slumped to mere 1.7 percent. The impact of the euro zone debt crisis, lack of economic reforms and high interest rates also hit the country’s growth throughout last year.

“The slow growth will severely pull down the service sector growth in the coming quarters. The current global situation remains fragile and steps need to be taken on the domestic front to guard against such uncertainties,” said Rajiv Kumar, secretary general, Ficci.

Such figures may give sleepless nights to policymakers in the North Block but finance minister Pranab Mukherjee has recently said that the Indian economy is resilient. A poll of 31 economists had recently projected India to grow at just 6.1 percent.

The weak rupee, which has shed nearly 12 percent from its 2012 high on pressure from imports and the euro zone crisis has increased the imports bill particularly in the oil sector. “They have done everything wrong so that rupee slides further… All they have done is another nail in the coffin of rupee,” said Lingle.

“This shows a grave crisis of investors’ confidence. We may be in the danger of slipping in to a 1991-like crisis. Urgent and bold steps are immediately needed to prevent the economy from descending into a full-blown crisis. This must be averted at all costs,” said Dr Kumar of Ficci.

In the new fiscal year starting from April 1, the government has forecast economic growth around 6.9 percent.