RBI focus on inflation will not yield results

A part of this slowdown is to be attributed to the paralysis in decision-making from which the government is recovering only slowly.

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India has now had a full year of growth below 6%. During the year ended June 30, 2012, India grew 5.9%. During the second half of this year, growth was even lower at 5.4%. Compare this growth with the average growth of 8.25% during the immediately preceding year ended June 30, 2011 - a solid 2.35 percentage points have, thus, been shaved off the annual growth rate. The decline is even sharper if we compare this growth to the last quarterly peak of 9.2% during the first three months of 2011.

A part of this slowdown is to be attributed to the paralysis in decision-making from which the government is recovering only slowly. The role of the paralysis is corroborated by the disproportionate slowdown in mining and quarrying and manufacturing, which are more susceptible to government decision-making.

Services, which are less dependent on the government, have been impacted less. Mining and quarrying saw negative growth of -0.95% while manufacturing grew a marginal 0.85% during the year ended June 30, 2012.