India's growth rate slips to 5.3%, Rupee devalues to all-time low

India's economy is showing signs of a major slowdown, even as the overall GDP (gross domestic product) growth rate slipped to nine-year low at 5.3 percent, and the Indian Rupee tumbled to all time low of 56.50 against the USD. The 5.3 percent GDP growth rate in the fourth quarter of 2011-12 is "lowest in nine years", mainly due to poor performance of the manufacturing and farm sectors, said official figures released today. During the quarter ending March 31, growth in the manufacturing sector contracted to 0.3 percent, from 7.3 percent in the corresponding period of last year. Similarly, farm-output also exhibited a sluggish growth and expanded by just 1.7 percent during the quarter, compared to 7.5 percent in the fourth quarter of 2010-11. However, mining and quarrying production growth stood at 4.3 cent during the quarter under review, as against a growth of meager 0.6 percent in Q4 of 2010-11. Growth in the construction sector slowed to 4.8 percent during January-March quarter of 2011-12, from 8.9 percent in the year-ago period. Growth in the services sector, including insurance and real estate, remained unchanged at 10 percent in the fourth quarter ended March. As another gloomy sign of the economy, the Indian Rupee tumbled by 26 paise and stood at a new all-time low of 56.50 against the USD. The fall in Rupee's value was attributed to increased capital outflows and strong demand from importers for the USD. Indian Rupee has been consistently devaluing over the past one year, particularly last six months, thereby giving a hard time to those involved in foreign trade (export-import).