The Gross Fixed capital formation (GFCF), which indicates the investment activity in the economy, contracted by 5.2 percent in Q3 as against a contraction of 4.1 percent in Q2. Overall, the loss of economic momentum has continued in the third quarter.
What lies ahead?
According to D K Joshi, chief economist of rating agency, Crisil, the government needs to unclog the financial sector mess and keep the spending spree continue to get the economy out of the slowdown mess. “Imagine a machine working without lubrication. That’s how it is now with financial sector fighting a liquidity problem,very less bank lending to industries and manufacturing sector in a poor shape,” said Joshi.
Bank credit growth has continued to decline going by the latest RBI numbers. It grew by just 6.3 per cent year-on-year in the fortnight ending February 14. At 6-7 per cent growth, bank lending is lowest in close to six decade.
The biggest problem is that the government doesn’t seem to acknowledge the extent of the slowdown and is busy portraying a rosy picture by listing ‘green shoots” in the economy where clearly there are no strong growth revival indicators at this point.

The economy at a seven-year low of 4.7 percent in Q3 is in ICU and the Narendra Modi-government must admit the state of the economy and work on a stimulus plan. That's the first step to resolve the problem.
(Data support by Kishor Kadam)