News that GDP growth has slowed considerably to 5.3 per cent in
the fourth quarter of 2011-12, as compared with 9.2 per cent in
the corresponding quarter of the previous year, could not have
come at a worse time for the government. While quarterly GDP
estimates tend to be revised substantially, the evidence that
the GDP growth rate has been consistently declining over the
four quarters of the last financial year and that the fourth
quarter rate is the lowest in nine years makes it imperative for
the government to respond.  However, other aspects of the
emerging economic scenario make the choice of that response
difficult. There are three disconcerting aspects of that
scenario that are being widely referred to. The first is
inflation, which had moderated and the government was hoping
would just go away. However, the annual month-on-month rate of
inflation as measured by the national Consumer Price Index had
risen to 10.4 in April, from 9.4 per cent in March, 8.8 per cent
in February and 7.7 per cent in January