India 2011 Q3 GDP Growth Slides to 6.1%

The Indian GDP figures for the third quarter (Oct – Dec) 2011 – 12 were announced today, and the GDP growth has slowed down to 6.1% which is much lower than the 6.9% growth reported last quarter.

I had done a post on how GDP is calculated in India using 2011 Q2 numbers and you can see there that out of the 4 GDP numbers that are released by the Ministry of Statistics and Programme Implementation, the one that is reported widely is the GDP at factor cost at 2004 – 05 prices which breaks this number out according to sectors and shows how each sector combines to contribute to the economy.

Here is a pie chart that shows how much each sector contributed to the economy in Q3 of 2011. There is a table below this which shows the full name of the category and the value in crores.

Q3 2011 GDP Share of Various Sectors
Q3 2011 GDP Share of Various Sectors

Here is the table that has the numbers as well as the detailed headings.

Sector Rs. In Crores
Agriculture, Forestry & Fishing 2,30,168
Mining & Quarrying 27,334
Manufacturing 1,95,228
Electricity, Gas & Water Supply 24,509
Construction 1,02,887
Trade, Hotels, Transport & Commn. 3,61,074
Financing, Insurance Real estate & Business Services 2,33,537
Community, Social & Personal Services 1,64,866
Total 13,39,603

The thing that jumps out from this is that trade, financing and community form about 56% of the economy and these are part of the services sector and when you look at the breakup of how various sectors performed you see that even though these sectors did reasonably well on their own, the overall GDP was dragged down by the other components. Here is a chart of what that looks like.

Growth Rate of Various GDP Sectors Q3 2011 over 2010
Growth Rate of Various GDP Sectors Q3 2011 over 2010

Here is how these sectors have done this quarter versus the last year in Rs. Crores..

Sector 2011 Q3 2010 Q3 Growth Rate
Agri 230168 224044 2.7%
Mining 27334 28200 -3.1%
Mfg 195228 194435 0.4%
Elect 24509 22480 9.0%
Constn 102887 96000 7.2%
Trade, Hotels 361074 330573 9.2%
Financing 233537 214205 9.0%
Community 164866 152857 7.9%
Total 1339603 1262794 6.1%

I think looking at these numbers drive home the point that at a policy level there should be focus on taking action and moving things along at a fast pace.

It is wrong to blame this low number on global factors; there are a lot of things that can be set right domestically and dealt with quickly which will give a boost to the economy.

Inaction and waiting for the global economy to improve is only going to make the situation worse.

On a more personal level, I think this low number coupled with easing inflation will get the RBI to bring down interest rates, and if you were waiting to get into any fixed income investment, you should think of doing it sooner rather than later.

Update: There was an error in the table in the post where I used the data from GDP by Economic Activity at Market Prices instead of Constant Prices (2004 – 05) which is what the pie chart is based on and what’s commonly reported as well. My apologies for the error and thanks to Ashish for pointing it out in comments.

Book Review: Dare to Dream A Life of M.S. Oberoi by Bachi Karkaria

Bachi Karkaria’s biography of Rai Bahadur M.S. Oberoi is one of my favorite books and I have read it thrice now.

Rai Bahadur Oberoi’s life is a remarkable story of a man who built an international hotel chain from scratch, and his qualities of diligence, perseverance and patience are very inspiring.

It is a fascinating tale which truly starts when Rai Bahadur takes and fails the PWD (Power and Works Department) test, which was the first test he ever took.

He then applies for a job at a hotel in Simla where he is again told that there are no vacancies. This doesn’t deter him as he waits patiently for the manager to go home for lunch, and impresses him with his perfect tie knot and impeccable manners to score a job tracking coal supplies in the Cecil hotel, and thus starts the career of the man who will later go on to own many hotels much bigger than the one where he started off.

Bachi Karkaria has written the book beautifully and she draws lovely parallels that bring a smile to your face and make the biography read like a novel.

An example:

The effects of Spencer and Co’s neglect of AHI had to be reversed. Flashmans at Rawalpindi required a new wing. Maidens in Delhi needed funds to get back its former glory. Its predicament was not unlike that of three young women, who decades earlier, had come out East, stayed in the hotel and, caught up in Delhi’s blandishments, overshot their budget. They were forced to send a telegram to their parents: ‘Send money or can remain maidens no more.’

The story is very inspiring and the hard work and innovativeness of Rai Bahadur Oberoi is really impressive and makes a mark on you. One of the examples I like the most is of the troubles faced by Oberoi Sheraton in delivering tea and breakfast fast enough to the upper floors of the group’s first high rise hotel. Rai Bahadur, who was 72 at the time, woke up at 5 every morning, and stayed in the kitchen till he found a solution to the problem, first by moving the entire room service bay to the other end of the kitchen bringing it closer to the room service elevators and then by installing ‘pantry elevators’ that were stocked with soda, chips, tea and coffee. Room service relayed the orders to the waiter manning the lift and then he would make his way quickly by just pressing the button on the elevator and making tea while he made his way to the room.

This is just one of several such incidents mentioned in the book and while the book highlights the grit and charm of Rai Bahadur Oberoi throughout the story, it also does justice to the number of other people who contribute to his success, especially his mother and wife.

Bachi Karkaria also chronicles the part fate plays in the success of Rai Bahadur and it’s quite clear that he couldn’t have achieved his success without a little help from lady luck.

I really love this book, and I heartily recommend this inspiring and entertaining story to everyone.

Profiles: Jitendra P.S. Solanki

Regular readers know that I’m trying to create a directory of financial services providers here, and from time to time I invite financial advisers who have been answering questions on the comments section sincerely to create a profile for themselves. There are presently just 3 profiles on the site, and Jitendra’s is the fourth one.

This number is so low because the profiles are invitation only, and the only way to get an invitation is to answer questions sincerely in the comments section.

With that said, here is Jitendra’s profile.

Jitendra P.S.Solanki, Certified Financial PlannerCM   and IIT-Roorke  Alumni

Employment Status: Self Employed

Organization: JS Financial Advisors


Services Offered: Fee-based Financial Planning, Services on Various Elements of Financial Planning, Consultation including Hourly Fee Based Services.



Jitendra P.S. Solanki is Founder of JS Financial Advisors. A management graduate from IIT Roorkee he has 10 years of experience in financial services and started his venture after becoming a CFP in 2010.

Professional. He is amongst the few financial planners in India who are actually into creating comprehensive financial plan for their clients.

Financial Planning: Is not a rocket science but a very dynamic process which not only provides a direction to financial decisions but also help in accommodating changes in your life easily. The concept has been highly misunderstood by most people which need to be clarified so that Financial Planning is accepted in the right manner. I always believe “More than physical health, financial health is the key to manage your financial well-being”.

Services: JS Financial Advisors specializes in fee based comprehensive financial planning services to people across the globe. For meeting needs of various individuals we also offer services on various elements of financial planning like Retirement,Insurance,Investment, Portfolio Review ,estate Planning and Consulting. Recently we have added hourly based services. One of the niche service we are going to add is Financial planning for families of special children’s in association with my spouse who is a doctor in the concerned area. The services will be announced soon.

Experience:  After completing my MBA from IIT Roorkee , I have been associated with brands like DCB Bank, HDFC Bank,MotilalOswal wealth Management. My last assignment was with a broking outfit KassaFinvest in Delhi as Head –Distribution.

Beyond Financial Planning:

Doing research & analysis of various financial products is my keen interest. I have been been conducting various training programmes for IFAs and Students pursuing CFPs. I was also involved with one of the large AMC for imparting training to their IFAs in northern India on various personal finance topics.

Financial Literacy: I have started to generate awareness on various financial planning issues.  I have been writing numerous articles on my blog to help people understand and take important financial decisions without getting trap in the misseling prevailing in the industry. Also, I have been conducting workshops in various corporates for their employees and have tied up with various institutions to spread financial literacy through such programmes.

Media: I have written numerous articles, case studies and answered queries of readers in various publications to spread financial planning Awareness. Business Bhaskar, Indian Express, Money Mantra Magazine, Rashtriya Sahara are the prominent ones. The details can be viewed at

Memberships and Association: Currently, I am amember of The Financial Planners’ Guild, India, a professional body of practicing Financial Planners with the motto of creating awareness on Financial Planning among the public.

Fees: I currently charges Rs 12000-15000 for comprehensive financial planning; Rs 1500-6000 for various elements of financial planning and hourly fees for consultancy services is Rs 1000/hr.Fee for niche services will be announced soon.

Thoughts on investing life insurance proceeds

Mohan posted an excellent comment on the Suggest a Topic page the other day, and I’m reproducing it here.

Dear Manshu,

I read your blog before taking any financial decision and i thank you a lot as your blog has really educated me regarding the various financial products. Thanks a lot for your untiring work . However, of late, i have been thinking and worked out a way / plan for the financial benefits which are likely to be received against my policies , god forbid, if something happens to me during the tenure of these policies. I want some one/ some trusted agency/ to handle any benefits received from my policies and benefits given by my employer/ in a particular manner . Are there any such agencies? if not, what steps should i take to ensure that the funds received are deployed gainfully in fd’s/ MF’s etc, as my wife is a housewife and is not very knowledgable about financial products and she may have to take care of my 2 kids and my old mother.

If I understand this correctly, there are two concerns here – one is how do you ensure that your family gets all due benefits and then the second one is how do you ensure that the money is deployed gainfully.

This is a great thought, and while I hope none of us have to go through such an ordeal it’s wise to prepare for this.

I have never thought of this question deliberately till now so let me pen down my thoughts on how I’d like this to be handled and then I’m sure a lot of you will have great thoughts of your own on this too.

I must admit that no single person knows about all my investments and insurance but I think between my dad and wife – they will know all of them.

So, the first step should be to make sure that both of them know about everything and get a complete picture.

I think that’s the first step, to have someone you trust know about all your investments. If they don’t know about these investments, then there’s not much they can do beyond that.

The most practical way of doing this is create a list somewhere that’s easily accessible and can serve your purpose as well. I have a Google Spreadsheet which has these type of details and since it is a snapshot of what I own at what price – it’s very useful for me and I update it regularly. Sharing such a thing with my wife and dad will take care of the first thing.

The second step is to specify what should be done with each of the investments. So, if there are fixed deposits then let those fixed deposits mature, and if there are shares then sell off all those shares and get cash for them. This is probably a very uncomfortable thing to talk about and quite honestly I don’t see myself bringing up this conversation but it seems to be the right thing to do.

To claim all of this money – you would need paperwork and this brings me back to Bemoneyaware’s post on succession certificates and wills that I shared some time earlier.

Now, let’s come to the heart of the question which is if there is an agency or organization that handles this money on your behalf and which can invest it properly.

I don’t think there is anything like that at all. The closest I can think of is a financial planner, but I don’t think there is someone who specifically does this type of work only.

I think that if someone finds themselves in this unfortunate circumstance – they should go the ultra conservative and simple route of investing all their money in fixed deposits only.

It is easy enough to understand and administer and while there may be other products that give a higher yield – their complexity may make them unwieldy for someone not too familiar with financial products.

The other reason I say this is probably something a lot of you can very easily relate to and that’s the sad reality of the financial landscape.

A lot of people are out to screw you financially and invest your money for their selfish gains and not your benefit. Given that these type of people are a much larger proportion of the adviser / agent community – I feel that the chances to falling prey to one of these people is very high for someone who is not financially savvy and has no one to fall back on. Losing your loved one is a big enough tragedy and compounding that problem by investing precious little resources in crappy products is the worst that can happen to somebody.

In thinking about this I feel that the extra two or three percentages that someone can earn by investing in some other debt instrument is not worth the risk that comes with shopping for such products without having someone savvy to look out for your interests.

These are my thoughts on the subject – what do you think? Have I become too cynical or would you say the same thing?