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| Indian economic growth slows to 5.3% | Indian economic growth slows to 5.3% |
| (about 1 hour later) | |
| The Indian economy grew at an annual pace of 5.3% in the three months to the end of September, down from 5.7% in the previous quarter, figures show. | The Indian economy grew at an annual pace of 5.3% in the three months to the end of September, down from 5.7% in the previous quarter, figures show. |
| Although the rate was slower than earlier in the year, it was still better than many analysts had expected. | |
| The figures cover the first full quarter under the government of Prime Minister Narendra Modi. | The figures cover the first full quarter under the government of Prime Minister Narendra Modi. |
| Earlier, Indian stock market indexes hit new highs, in anticipation of the figures. | Earlier, Indian stock market indexes hit new highs, in anticipation of the figures. |
| Investors were also encouraged by the news that the government is to cut its holdings in state-run banks, such as State Bank of India. | Investors were also encouraged by the news that the government is to cut its holdings in state-run banks, such as State Bank of India. |
| Interest rate cut | |
| "The GDP growth number is slightly better than we expected," said Shivom Chakrabarti, senior economist at HDFC Bank in Mumbai. | |
| "Overall, the economy has bottomed out and there is a slow and modest recovery. Now the onus is on the government to boost growth by reviving the investment climate and get reforms moving." | |
| Observers had predicted the economy would grow just 5.1% in this quarter. | |
| Despite the slightly better than expected figure, pressure is mounting on India's central bank, the Reserve Bank of India, to cut interest rates, possibly as early as the next policy review meeting on 2 December. | |
| The benchmark interest rate has been kept at 8% since last January in an effort to curb inflation. India has a history of high inflation, but recently the rate dipped below 6%. | |
| So far central bank governor Raghuram Rajan has resisted calls to lower interest rates to stimulate growth in Asia's third largest economy. | |
| Most analysts expect him to wait until the spring to change rates. | |
| Analysis: Sameer Hashmi, BBC India business reporter | |
| When Narendra Modi swept to power back in May he promised to revive the economy. | |
| Since then leaders including David Cameron and Xi Jinping have led trade delegations to India. | |
| Top chief executives like Mark Zuckerberg from Facebook and Microsoft's Satya Nadella have also visited. | |
| Many international firms have announced investment plans and the Indian stock market has been soaring. All this excitement has been attributed to the 'Modi effect.' | |
| But many had expected the government to unleash some big bang economic reforms by now, which hasn't happened. | |
| Though they have taken some steps in that direction, the economy still faces some fundamental challenges especially in the energy and infrastructure sectors. | |
| The government is in the process of addressing some of the concerns but most economists warn that the steps taken in the last few months will have an impact only in 12 to 18 months time. |