5.3%: India Growth Story crawls to its slowest in 6 years

The Mumbai attacks were a well-coordinated strike on India's economy, its internationalism, it pluralism, its openness.

Now this nuclear-armed nation, the world's biggest democracy, faces a historic challenge—one that will test its mettle and shape its role on the world stage.

India’s expectations that the economy will grow a healthy 7.1 per cent in the current fiscal suddenly seem unrealistic with the gross domestic product for the October-December 2008 or the third quarter slowing down to a six-year low of 5.3 per cent. The economy grew 8.9 per cent in the corresponding quarter last fiscal.

The lower-than-expected growth rate was largely because of a sharp slide in agricultural output and also a contraction in manufacturing. For the economy to clock a 7 per cent growth rate this fiscal, it would have to grow by at least 7.3 per cent in the ongoing quarter (January-March), which is highly unlikely. A weaker fourth quarter performance would take the full-year GDP growth rate down to the range of 6-6.5 per cent.