By: Talat Mohsin
India’s gross domestic product has slowed down to 5 percent in the first quarter of the fiscal year 2019-20. This has resulted in the slowest GDP growth in the last 25 quarters.
Experts have expressed their shock on this development, even saying that the economic slowdown was bigger than expected. According to government reports, weak consumer demands and private investments are being credited for the slowdown, along with weak manufacturing.
The GDP growth has now slowed for the fifth consecutive quarter. The previous low was recorded in the fourth quarter of the fiscal year 2012-13 at 4.3 percent. The GVA (gross value added) was recorded at 4.9 percent, which was also the slowest in 19-20.
The manufacturing sector grew at a rate of 0.6 percent in the first quarter of 19-20, from 12.1 percent in the same time period last year. The agriculture sector also slowed down from 5.1 per in the first quarter to 2 percent in the same period.
Meanwhile, real estate dropped down to 5.7 percent from 9.6 percent. According to Chief Economic Advisor Krishnamurthy Subramaniam: “Quarterly GDP estimates show that India’s GDP growth, while high, has shown some slowdown. This is due to both endogenous and exogenous factors. Impact comes, especially from global headwinds due to deceleration in developed economies, Sino- American trade conflict, etc.”
He added-“ similar phenomenon has also been observed previously before during Q4 (2012-13) and Q4 (2013-14) when growth was around 5 percent. Electricity and power generation, which is a leading indicator across the world, grew by 8.6 percent- a good sign of green shoots towards higher growth.” ( statement as reported in The Indian Express)