GDP Q2 2019: GDP rate at lowest in last 6 years

Monday, 02 Dec, 2019

The Gross Domestic Product (GDP) increased 4.5 per cent over the period compared with the same three months in 2018, down from the 5 per cent pace in the second quarter, official data shows, reports the worldwide media.

The Indian government also released core sector data, which indicated that eight core infrastructure industries had contracted by 5.8 percent in October.

He stated that the final 5 years had been of the "detoxification of the economy" and within the subsequent 5 years a "series of reforms" can be taken to make it one of the crucial highly effective economies of the world.

On Thursday, Finance Minister Nirmala Sitharaman said in the Rajya Sabha: "Looking at the economy with discerning view, you see that the growth may have come down, but it is not a recession yet or it won't be recession ever".

In order for India to get to the $5 trillion mark, it needed to grow at 11-12% nominal rate for the next five-years.

"The Modi government has taken the hard decision in the interest of Indian industry". The central bank has already cut interest rates by 135 basis points this year to the lowest since 2009, with economists predicting more easing to come next week.

The slowdown in the July-September quarter was mainly due to a sharp dip in the manufacturing sector and agriculture output, the Ministry of Statistics and Programme Implementation said in a statement. The Centre will also work towards bringing down Goods and Services Tax (GST) to the minimum level on all essential goods and rationalise other rates.

Manufacturing, which is a focus area for Modi's administration as India tries to woo investors, declined 1% in July-September from a year ago, while farm output grew 2.1%.

Value-added growth in the farm sector was just 2.1% as compared to a growth of 4.9 percent the same time previous year.

Economists say the investment-led slowdown has broadened into consumption, driven by financial stress among rural households and weak job creation, while also pointing out that government measures are not necessarily meeting the requirements of low consumer demand.

Talking about the GDP growth rates, she expressed hope that the next set of numbers would be better. "We are fairly convinced that GDP growth in India is likely to stay low and likely to stay range bound over the next four to six quarters", she said. "We expect the RBI to keep cutting rates".

Q2 GDP at 4.50% indicates a slump in economic activity and it has become quite pronounced after a slip to 5% in Q1. April-Oct fiscal deficit exceeds full-year target India's fiscal deficit in the first seven months through October stood at 7.2 trillion rupees or 102.4% of the budgeted target for the current fiscal year, government data showed on Friday.

In October, the RBI reduced its key lending rate for the fifth consecutive time to 5.15 per cent, the lowest in around a decade, to boost consumption and reverse the slowdown.