De-industrialisation has set in

Amidst the talks of governance deficit and policy paralysis, the slippage of the third quarter GDP growth rate to 6.1% from 6.9% over the first nine months of the current fiscal year is not unexpected. Nor should it be surprising that the manufacturing sector has come almost to a standstill in Q3 2011-12, with a growth rate of 0.4%. If we take the first nine months of 2011-12, y-o-y growth in manufacturing has been at a record low of 3.4%. Apparently, the projection of 3.9% growth in manufacturing for the whole year as made by the Prime Minister’s Economic Advisory Council in its ‘review of the economy 2010-11’ released last week is optimistic.

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