Is India's Growth Story in Awry?

Bangalore: India’s growth seems like a dream. In the beginning of every financial year the government comes up with plans and ideas of expansion but by the end of the year these ideas fade away and rather than increase we can see the decline in the gross domestic product and the capital formation, therefore reducing the chance of any growth in our country.

With the diminishing impact of investments set during 2011-2012 has slowly taken away the stand out effect of India’s growth. The capital formation was negative at 0.2 percent during 2011 in comparison to 8.9 percent during 2010. As a result of decrement in the fixed capital formation the aggregate capital formation also dropped down to 30.6 percent of GDP from 32.8 percent. According to the RBI the project finance data has seen a downtrend as well as the corporate investment has withered away.

The pace of economic expansion has loosened up to 7.7 percent in 2011 which was less than the previous years with 8.4 percent. This percentage further dropped to 6.9 percent in July-September quarter and more to 6.1 percent in October-December quarter. There are indications about the overall growth of 7 percent in this fiscal year of 2011-2012. The government is concerned about this deterioration when the global economy is also facing mayhem especially in the European zone.