Faring badly in farm, manufacturing and mining sectors, India's economic growth or Gross Domestic Product (GDP) plummeted to a decade's low of 5 percent for the 2012-13 financial year from one time eight percent, according to data released by the Central Statistical Organisation (CSO) on Friday.
CSO, a government body which monitors statistical activities in the country including National Income Accounting, said the farming sector grew at 1.4 per per cent during the year and the manufacturing sector growth was just 2.6 per cent.
"India's economic growth was at 6.2 per cent for the 2011-12 fiscal. It has grown by 5.4 per cent, 5.2 per cent and 4.7 per cent in the first, second and third quarters, respectively, of 2012-13," CSO said.
Immediately after the figures were released the Sensex plunged over 200 points.
While India's economic growth has plunged from 8 per cent to just 5 per cent in a few years, the country is desperately trying to woo investors from across the world. Several high-level delegations from India and top ministers have been wooing investors across the world to invest more in India. Also India recently cut tax rates for foreign investors on interest income from investments in government and corporate debt, aiming to catch more funding to link its existing account deficit and improve its reformist credentials.
Earlier in April this year, Prime Minister Manmohan Singh had said the current downturn was "temporary" and he was confident the country's growth rate would retrieve its "8 percent mark" provided the mood remained optimistic among the business community who are worried over high rates of inflation.
Meanwhile India's power opposition Bhartya Janta Party (BJP) lashed out at the ruling United Progressive Alliance (UPA) government led by Congress party saying UPA's "mismanagement" must be blamed for the fall in India's growth rate.
"It is the worst failure of an economist Prime Minister Manmohan Singh. Mismanagement, misrule and non-governance have resulted in the dismal growth rate...this is the worst failure of an economist PM in managing the economy," BJP spokesperson Prakash Javadekar said here.
He said the BJP government led by former prime minister Atal Bihari Vajpayee government started with a growth rate of 4.5 per cent in 1998 and took it to 8.5 per cent in 2004.
"But when UPA inherited a very sound base of 8 per cent plus growth rate they brought it down to 5 per cent. If it continues with the same policies, the growth rate could even come down to 4.5 per cent in the next fiscal," Javadekar said.