The numbers suggest that other than the manufacturing segment, trade, hotels, transport and communication segment has also witnessed a slowdown in growth. The year-on-year decline for Q2 is 2.8 percentage points and the quarter-on-quarter decline is 0.6 percentage points. “The sector is bearing the brunt of the tightening monetary policy,” added Bery.

Other than these, there has been a slight decline in the financing, real estate and business services segments too. This is again an outcome of the tightening of monetary policy.

The recent fall in these two sectors has become a rising concern. Manufacturing and trade, hotels, transport and communication segment were growing fastest and pulling India’s GDP growth rate up. The two segments when combined have a weightage of 44.3 per cent in the GDP, as per the latest aggregate figures.

According to Rajeev Malik, Asia economic research, JP Morgan Chase, Singapore, “Growth is likely to moderate further owing to the more complete pass-through of monetary tightening. Additionally, rupee appreciation and softer external demand will also contribute to the anticipated moderation in economic growth.”

So, if there is a fall in growth rate and more so in the two fastest growing segments, how are we going to sustain our growth momentum?

According to Kumar, “We have almost reached the potential output of 8.5-8.7 per cent of the economy. Any further tightening of interest rates could lead to low credit availability and further downturn in demand.”

... contd.