The third quarter GDP numbers released by the Central Statistical Organisation shows what most economists were predicting - that growth was slowing down. At 6.6 per cent growth, it is the lowest in five quarters.
The CSO has also reduced its growth estimates for the year to 7.0 per cent, from the 7.2 per cent estimated earlier. This also means that the last quarter GDP growth will be even lower. While India still retains the bragging rights of being the fastest-growing major economy - our growth is slightly better than China's, albeit on a much lower base - it is of little consolation for most companies.
Even before the GDP numbers came out, other indicators had showed that the economy was slowing down. Demand in key sectors such as four-wheelers and two-wheelers had taken a hit. Even otherwise, consumption seemed to be slowing down. On the agricultural front, the distress was high enough for the government to take the unprecedented step of announcing a direct income injection for small, land owning farmers, starting from December itself.
Other signs of distress are quite high as well. Small and medium industries continue to suffer. Core sector growth is at a 19-month low. Third quarter profit growth among big corporates was at a much slower pace than earlier. New private investment is still anaemic. Exports have not picked up. And finally, all that is leading to a massive unemployment problem, even though the government denies it.
Once elections are over, the new government and its finance minister will have a big problem on their hands - how to fix an economy facing too many headwinds.