India's economic growth dropped to a six-and-a-half year low of 5 percent in the April-June quarter of 2019-20 from 5.8 percent in Q4 of FY2018-19 due to a sharp deceleration in the manufacturing sector and sluggish agriculture output, according to official data released on Friday, 30 August.
According to the National Statistical Office (NSO), the GDP at 'Constant (2011-12) Prices' in Q1 of FY2019-20 is estimated at Rs 35.85 lakh crore, as against Rs 34.14 lakh crore in Q1 of 2018-19, indicating a growth rate of 5 per cent.
Bloombergquint’s Ira Dugal discusses the factors for the slump in growth and the prospects of a recovery with Ashima Goyal, a professor at Indira Gandhi Institute of Development Research (IGIDR), Siddhartha Sanyal, the chief economist and head of research at Bandhan Bank and DK Joshi, a Chief Economist at CRISIL on State of the Economy.
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The Reserve Bank had marginally lowered the GDP growth projection for 2019-20 to 6.9 percent from 7 percent projected earlier in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.
This is also the first time since then that India has recorded two consecutive quarters of sub 6 percent growth.
The gross value added (GVA) growth in the manufacturing sector tumbled to 0.6 per cent in the first quarter of this fiscal from 12.1 per cent expansion a year ago.
Similarly, farm sector GVA growth remained subdued at 2 per cent as compared to 5.1 per cent in the corresponding period of the previous fiscal. Construction sector GVA growth too slowed to 5.7 per cent from 9.6 per cent earlier.However, mining sector growth climbed to 2.7 per cent from 0.4 per cent a year ago.
On the same day as the CSO report, the Finance Ministry announced its move of consolidating 10 public sector banks into 4, indicating its resolve to address the slowdown in GDP growth.
(With inputs from PTI)
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