Gross domestic product (GDP) data released on Friday once again indicated signs of sluggishness in the economy. India’s economic growth rate declined to just 4.5 per cent during the July-September, 2019 quarter, which is a six-and-a-half year low. This is the sixth consecutive quarter when sluggishness has been recorded in GDP. Earlier, the GDP growth rate was 4.3 per cent in the January-March 2013 quarter, while it was 7 per cent in the same period a year ago, ie, July-September, 2018 quarter. The growth rate was 5 percent in the first quarter of the current financial year.
In the first half (April-September) of FY 2019-20, there has been a 4.8 per cent growth in GDP, compared to 7.5 per cent growth in the same half a year ago. As per the data released by the National Statistics Office (NSO), the GDP at constant prices (2011-12) for the fiscal year 2019-20 in July-September stood at Rs 35.99 lakh crore as against Rs 34.43 lakh crore in the same period last year.
The main reason for the poor GDP figures was the slowdown in manufacturing and agriculture related activities. During this period, the manufacturing sector declined by one percent, compared to a growth of 6.9 percent in the same period a year ago. At the same time, the growth rate of agricultural sector has come down from 4.9 percent to 2.1 percent.
The growth rate of the mining sector declined from 2.2 per cent to 0.1 per cent. At the same time, the growth rate of electricity, gas, water supply and other services sector was 3.6 percent, compared to 8.7 percent in the same period a year ago. Similarly, the growth rate of trade, transport, communication and broadcasting services declined from 6.9 per cent to 4.8 per cent. Sluggishness was also reported in financial, real estate and business services.
How did GDP go in the last five quarters
April-June, 2019 5 percent
January-March, 2019 5.8 percent
October-December 2018 6.6 percent
July-September 2018 7.1 percent
April-June, 2018 8.2 percent
Statements are on the weak GDP figures
Former Prime Minister Manmohan Singh said that the GDP figures released today are not acceptable from anywhere. We should have increased by 8-9 per cent. This time the GDP has fallen by half per cent more than the first quarter. Only a change in economic policies will not solve it.
On GDP figures, the government’s Chief Economic Advisor KV Subramanian said that the growth rate of the economy could pick up during the third quarter of the current financial year. After the GDP figures were announced, he said, “We are saying once again that the foundation of the Indian economy will remain strong.” GDP is expected to pick up in the third quarter. ‘
A survey conducted by experts on Thursday showed that the growth rate could come down to 4.7 per cent in the second quarter of the current financial year. According to the survey, the global recession has significantly affected India’s exports. The growth rate was five per cent in the June quarter, but in the September quarter, it may be the weakest in the last 26 quarters.
It was seven per cent in the same quarter of 2018. In some media reports quoting government sources, it is being said that the growth rate in the September quarter may go below four per cent. Earlier, the growth rate in January-March 2013 was 4.3 percent. India Ratings Chief Economist Devendra Pant says that the decline in consumer consumption can slow down the growth rate of the urban sector, which has not got enough customers even in the festive season.
Repo rate may decrease again
Amar Ambani, senior president and research head, Yes Securities, said that the GDP growth figures are in accordance with our estimates. Hence, there was a sluggishness in the stock market for the last several trading sessions. “We estimate there will be a further reduction of one-fourth percent in December,” he said.
Fiscal deficit crossed target in first seven months
There has also been bad news on the fiscal deficit front. Between the first seven months of 2018-19 ie April to October, the fiscal deficit has exceeded the target of the current fiscal. The fiscal deficit in the first seven months stood at Rs 7.2 lakh crore ($ 100.32 billion), which is 102.4 percent of the budgeted target for the current fiscal. According to the data released by the government, the government received revenue of Rs 6.83 lakh crore in the period from April to October while the expenditure was Rs 16.55 lakh crore.