RBI and CSO data released shows decline in growth allover

The number crunching game of economics is the only thing at boom in this recessionary atmosphere around the globe. Data is being analyzed rigorously in order to get some positive outcome but the more the data come out and more the analysis done, we get more hopeless results every time. Recently I was going through the data released by the RBI and CSO, few renowned economists in India have predicted over the growth prospects of India in 2008-2009. Things are definitely not as bright as it had been in recent past.

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Real growth of GDP(market prices) would fall to 7.1% in 2008-09 from 9.02% and GDP growth at factor cost too would remain at around 7.1% in 2008-09.

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Growth of agriculture and allied activities would be at 3.3% this fiscal year when compared to last year's 4.55% growth. Industry sector which was experiencing an average growth of above 10% in last 4 years would decline to dismal 5.7% growth. IIP figures of August showed manufacturing output growth to be at 1.15% which is lowest monthly figure reported since October 1998. Outputs of capital goods have slumped to 2.3% from 20.4% immediately previous month. Tertiary sector or services will grow at 9.0% this year after enjoying a growth of above 10% every year in past three years. Per capital real GDP growth was 7.49% last year and may fall to 5.60% this time round.

Peaking oil prices of 2008 has already added greatly towards the debt of the country. Balance of payment will again remain negative. Exports in 2008-09 would touch $ 200 billion from $ 159 billion last fiscal but the gain from exports would be subsided by the increase of imports this year. Imports, this year, will be $ 314 billion from $240 billion last year. Out of this $314 Billion, import crude and products alone accounted for $106 billion.

Data is one part, the current economic turmoil is taking its toll all over the world. US government has bailed out Bank of America and Citi group twice now and still they doesn't seem to be in comfortable position. Bank of America has acquired toxic assets worth $118 billion, when it acquired Merillynch, of which around $100 billion would be bailed out by government itself.

According to a report by financial times 50% of US household are on the verge of bankruptcy. Sales of automobile are down by more than 30% now. Spiraling effect of economic activities or no activities has started to make things to get worst. Great depression doesn't seem impossible now.Ripple effects of this downturn is sure to reach India.