The economic growth is likely to fall to a three-year low of 6.9% in FY12, mainly due to sharp slowdown in manufacturing, agriculture and mining sectors, against 8.4% expansion in the last fiscal.
Agriculture and allied activities are likely to grow at 2.5% in FY12, compared to a robust growth of 7% in FY11, according to the Advanced Estimates released today by the Central Statistical Organisation (CSO).
Manufacturing growth is also expected to drop down to 3.9% in this fiscal from 7.6% last year.
The CSO's GDP growth projection is a tad lower than the 7% forecast made by the Reserve Bank of India in its quarterly monetary policy review last month.
In its mid-year Economic Review, the government had also pegged growth at around 7.5%. The current estimate is a sharply lower than the 9% growth projection for FY12 made by the government in its pre-Budget survey in February last year.
The latest GDP growth estimate of 6.9% for the entire fiscal means that the pace of economic expansion slowed in the second half of FY12, given that GDP growth in the April-September, 2011, period stood at 7.3%.
According to the advance estimates, mining and quarrying is likely to witness a decline of 2.2%, compared to a growth of 5% a year ago.
Growth in construction is also likely to slip to 4.8% in FY12, against an 8% in FY11.
Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1% this fiscal, against 10.4% last fiscal.
Commenting on the GDP growth estimates, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: "The 6.9% is consistent with what we have been saying.
"We said 7% for the year [2011-12] as whole. [With] 7.3% in the first half and 6.9 in the third quarter, 7% is possible."
According to the data, growth in electricity, gas and water production is, however, likely to be better this year. The segments are expected to grow up by 8.3% in FY12, against 3% in FY11.
During the current fiscal, the trade, hotel, transport and communication sectors are projected to grow by 11.2%, against 11.1% last fiscal.
Community social and personal services are pegged to witness a growth of 5.9%, compared to 4.5% in the year-ago period.
The government and the RBI had earlier said that global economic slowdown and the high domestic interest rate regime is likely to act as a dampener in this fiscal's growth. However, the 6.9% growth projected in the advanced estimates is lower than what experts have been forecasting.
The Indian economy had expanded by 8.4% in both FY11 and FY10, while growth in FY09 was 6.7%.
The advance GDP estimates are released before the end of a financial year to enable the government to formulate various estimates for inclusion in the Budget.