India's GDP growth falls to 4.5%, lowest in 6.5 years
The Centre released India's gross domestic product for the second quarter of the fiscal year 2019-20. For Q2, India's GDP witnessed a growth rate of 4.5% In Q1, India's GDP growth rate fell to 5%, the slowest growth since 2013. Economists had expected the growth to decline, amid weak consumer demand, a slump in factory activities, coupled with an unfavorable prolonged monsoon. Here's more.
India's GDP growth lowest since January-March 2013
India recorded a GDP growth of 4.5% in the July-September quarter, data released by the National Statistical Office on Friday showed. With this, the GDP reached a 26-quarter low, compared to January-March in 2013 when GDP numbers expanded at a 4.3% pace. The growth rate is also down from 7%, recorded in the same quarter last year.
Output in eight core industries fell 5.8% in October
The output in eight core industries fell by 5.8%, with six industries shrinking. Coal production declined by 17.6%, crude oil by 5.1% and natural gas by 5.7%. Similarly, production of cement, steel, and electricity fell by 7.7%, 1.6%, and 12.4% respectively. Production of fertilizers, however, witnessed an 11.8% year-on-year increase. The cumulative growth in April-October 2019 also fell to 0.2% from 5.4% last year.
Economists predicted a fall in GDP growth rate
In its poll of 41 economists, Bloomberg had estimated a GDP growth rate of 4.5% in Q2. Separately, a poll of 27 economists estimated gross value added (GVA) at 4.4%. Meanwhile, economists polled by Reuters had expected growth to slow down to 4.7%.
GDP expected to pick up in Q3: Chief Economic Advisor
Speaking on the declined growth rate, Chief Economic Advisor KV Subramanian said, "We are saying again that the fundamentals of the Indian economy continue to be strong. GDP is expected to pick in Quarter 3." Meanwhile, Congress leader Randeep Singh Surjewala mocked the "double-digit" GDP growth rate. Calling it "Godse Divisive Politics (GDP)," Surjewala said, "We are in a virtual free-fall."
Surjewala calls GDP growth rate 'abysmal'
India’s GDP has collapsed to an abysmal 4.5%. We are in a virtual free-fall. This is the lowest GDP quarter in 6 years.— Randeep Singh Surjewala (@rssurjewala) November 29, 2019
But why is the BJP celebrating?
Because their understanding of GDP ( Godse Divisive Politics) suggests double digit growth levels.
All in the perspective! pic.twitter.com/HsJuIPDDgV
April-October fiscal deficit reaches 102.4% of FY20 target
Notably, India recorded a fiscal deficit of Rs. 7.2 lakh crore between April-October, 102.4% of the FY20 budgeted target of Rs. 7.04L crore. In the same period, a revenue deficit of Rs. 5.46L crore was recorded, 112.5% of the budgeted target of Rs. 4.86L crore.
Economy growth down, but no recession: Nirmala Sitharaman
The Modi government has taken several measures to help the ailing economy, including announcing a cut in corporate tax in September. The move was aimed at boosting investments. Meanwhile, during a parliamentary debate on Wednesday, Finance Minister Nirmala Sitharaman said the economy is experiencing a slowdown, but it's not a recession. Sitharaman on Thursday sought the Parliament's approval to spend an additional Rs. 21,000cr this fiscal year.