A lower than expected growth rate of India’s Gross Domestic Product (GDP) in the fourth quarter of the financial year till March 2012 has shocked the Asia’s third largest economy beyond government and business circles.

India’s GDP growth has fallen to its lowest level in 9 years to 5.3 per cent for the fourth quarter of the financial year till March 2012. The GDP growth for the same quarter of 2010-11 was 9.2 per cent, showed the latest data announced by the company.

Growth in the manufacturing sector fell 0.3 per cent, from 7.3 per cent in the same quarter of the previous financial year. The agricultural output rose by just 1.7 per cent during the quarter, compared to 7.5 per cent in the fourth quarter of the previous year. As for the whole financial year, the national GDP growth in 2011-12 fell to 6.5 per cent from 8.4 per cent in the 2010-11.

The Economic Times carried a headline indicating the country is heading towards a 1991 like situation when the government needed an IMF bailout to save itself from bankruptcy. Others have described the low figures as a wakeup call for the government.

Besides low growth rate, the economy is also facing other major challenges like falling value of the Indian rupee, annual inflation remains high at around 7.0 percent, while the current account and public deficits are large. The government is facing a high debt and there is less scope of a economic stimulus package.