GDP growth seen slipping to 11-yr low of 5pc this fiscal: Govt data
India's GDP growth is seen dipping to an 11-year low of 5 percent in the current fiscal, mainly due to poor performance by the manufacturing and construction sectors, government data showed on Tuesday.
As per the first advance estimates of the national income released by the National Statistical Office (NSO), the manufacturing sector output growth will decelerate to 2 percent in 2019-20, down from 6.9 percent in the previous financial year.
Likewise, the construction sector growth is estimated at 3.2 percent as against 8.7 percent in 2018-19.
According to back series GDP data released by the government in November 2018, the previous low in economic growth was recorded at 3.1 percent in 2008-09.
The dismal performance for the fiscal was anticipated as the Gross Domestic Product (GDP) growth in the first quarter was 5 percent and 4.5 percent in the subsequent three-months period.
The Reserve Bank of India (RBI) had also lowered its forecast for the economic growth to 5 percent while announcing its bi-monthly monetary policy last month.
The macro-economic data is important as Finance Minister Nirmala Sitharaman would be using it for preparing Budget estimates for the next financial year. She is expected to present the Budget 2020-21 in Parliament on February 1.
The NSO data further revealed that deceleration in growth will also be witnessed in other key segments, like agriculture, electricity, gas and water supply, trade, hotel and transport sector, financial, real estate, and professional services.
Whereas, some sectors, including mining, public administration, and defence, showed minor improvement.
As per the advance estimates for 2019-20, the growth in real GDP during 2019-20 is estimated at 5 percent as compared to 6.8 percent in 2018-19.
The estimated growth of real GVA (Gross Value Added) in 2019-20 is 4.9 percent as against 6.6 percent in 2018-19.
The GVA at basic prices for 2019-20 from agriculture, forestry, and fishing sector is estimated to grow by 2.8 percent as compared to 2.9 percent in 2018-19, the CSO statement said.
As regards, mining and quarrying sector, the GVA at basic prices for 2019-20 is estimated to grow at 1.5 percent as compared to 1.3 percent in 2018-19.
The per capita income at current prices is estimated at Rs 1,35,050, showing a rise of 6.8 percent, as compared to Rs 1,26,406 during 2018-19 with the growth rate of 10.0 percent.
Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 57.42 lakh crore in 2019-20 as against Rs 55.70 lakh crore in 2018-19.
At constant (2011-12) prices, the GFCF is estimated at Rs 45.93 lakh crore in 2019-20 as against Rs 45.48 lakh crore in 2018-19.
"In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2019-20 are estimated at 28.1 percent and 31.1 percent, respectively, as against the corresponding rates of 29.3 percent and 32.3 percent, respectively in 2018-19," the CSO said.
Commenting on the data, ICRA principal economist Aditi Nayar said the momentum of spending by the central government dipped in October-November 2019, and there are apprehensions that revenue concerns may necessitate an expenditure squeeze, which has emerged as a key risk to the pace of economic growth.
"For FY20 as a whole, we expect GVA and GDP growth to print at 5.1 percent and 5.3 percent, respectively, modestly higher than the advance estimates of 4.9 percent and 5.0 percent," she said.
(Edited by Suman Singh)