India's economy grew at the slowest rate in almost six years, 5.3% in the quarter ended Dec. 31 2008, signaling the global downturn's impact even in a nation less dependent on exports than others in Asia. Gross domestic product grew 8.9% in the same period the year before and 7.6% in the previous quarter, according to the Central Statistical Organization.Some of the key issues the economy is facing are:
- Recessions in key export markets such as the U.S. and Europe have prompted Indian exporters to cut production and lay off workers.
- Manufacturing output dropped to 0.2%.
- Capital inflows have all but dried up as risk-averse investors shun emerging markets.
- Drop in farm production.
- Indian rupee weakening on daily basis now.
- Liquidity crunch is affecting infrastructure and capital intensive projects.
- Country's debts are swelling, that might affect the investment grades of the country.
- Scheduled elections.
All these issues on a short term seems to be towering on growth meter. My view is economy will be back on track only in the year 2013. It might improve by 2010 but the boom would be witnessed only by the end of fiscal 2013.