THE Q3 TUMBLE

That India’s GDP grew just 4.4 per cent in the third quarter (Q3) of 2022-23 compared to 5.2 per cent in the same quarter of the previous fiscal caught many by surprise.

- M.G. Arun

For an economy widely touted to show a yearly GDP growth of 7 per cent for the fiscal year, the Q3 numbers seem disappointing. To target 7 per cent, the economy will have to grow at over 5 per cent in Q4. How feasible is that, given the challenges all around?

The biggest disappointment came from manufacturing, which, despite a focus on making in India and production-linked schemes, still showed de-growth. Growth in the sector was -1.1 per cent in Q3FY23, compared to a growth of 1.3 per cent in the year-ago quarter. Moreover, from a growth of 6.4 per cent in Q1FY23, manufacturing had slipped to -3.6 per cent in the second, only to recover a bit in the third. Some experts attribute the slowing growth in manufacturing to the weak profit and loss accounts of companies in the sector, where their Q2 financial results record a fall in profits due to high input costs.