Amid the widening economic slowdown, the Government of India data presents the nation’s GDP at a 11-year-low of 5% in the current fiscal.
This is majorly attributed to the poor performance by manufacturing and construction sectors, the government data published on January 07, 2020 informed.
As per the advance estimates for 2019-20
- Real GDP growth is expected to be 5% against 6.8% in the previous fiscal year
- Gross Value Added (GVA) growth is estimated as 4.9% compared to 6.6% during the previous year
- Per capita income at current prices has been projected at Rs 1,35,050, a 6.8% rise against Rs 1,26,406 at a rate of 10.0% in 2018-19
- Gross Fixed Capital Formation (GFCF) at current prices has been projected as Rs 57.42 lakh crore in the current fiscal compared to Rs 55.70 lakh crore in 2018-19
- The National Statistics Office (NSO) data estimates the manufacturing output growth to fall to 2% in 2019-20, below 6.9% of the previous year
- Whereas, the construction sector is expected to decline to 3.2% against 8.7% in 2018-19
- Agriculture, electricity, gas and water supply, trade, hotel, transport, financial, real estate and professional services are among other sectors to witness a decelerated growth
“In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2019-20 are estimated at 28.1 per cent and 31.1 per cent, respectively, as against the corresponding rates of 29.3 per cent and 32.3 per cent, respectively in 2018-19,” the Central Statistics Office (CSO) said in a statement.
The Reserve Bank has also lowered its economic growth forecast to 5% in its bi-monthly monetary policy in December 2019.
According to the GDP data, the previous low in economic growth was recorded in 2008-09 as 3.1%.
ICRA principal economist Aditi Nayar informed that the pace of government spending decreased in October-November 2019 and opines the spending squeeze will cause a serious risk to the overall economic growth.
“For FY2020 as a whole, we expect GVA and GDP growth to print at 5.1 per cent and 5.3 per cent, respectively, modestly higher than the advance estimates of 4.9 per cent and 5.0 per cent,” Nayar adds.
Indian’s Real GDP Growth: March 2008 to March 2020