India’s gross domestic product (GDP) growth rate continued to decline for the third consecutive quarter and stood at 4.5% for in third quarter 2012. Correspondingly, the construction segment, and the financing, insurance, real estate and business services segment saw a lower growth rate of 5.8% and 7.9%, respectively compared to the previous year. However, there are signs of improvement in the overall economy, with the manufacturing sector witnessing a growth rate of 2.7% in January 2013, compared to 0.7% in December 2012. The recent announcements in the Union Budget for 2013-2014 that stressed on structural reforms and policy initiatives are intended to accelerate the GDP growth rate and address the fiscal deficit, aiming at inclusive and sustainable development. The Central Bank undertook two rounds of rate cuts and reduced the Repo Rate by 0.25% each time this quarter, and also reduced the Cash Reserve Ratio by 0.25% in January to boost growth by providing cheaper loans and more liquidity in the financial markets.
Source : Cushman & Wakefield