There are more signs of an economic slowdown in India. Industrial growth in the first quarter of fiscal 2008-09 dipped to 5.2%, down from 10.3% in the previous year and a result of high interest rates and input costs plus the weaknesses in the global economy.
A new government report has forecast GDP growth for the year at 7.7%. This is down from earlier forecasts of around 8% and the average 8.8% growth recorder over the past four years.
And the panel responsible for this report said: “The downside risk to our growth expectations in 2008/09 is primarily from a further deterioration in global conditions with its attendant impact on India — be it in the sphere of oil prices or capital markets.”
India is clearly not immune to developments in the US and global economies. Now is the time to bury the much debated decoupling theory.