Sharp deceleration in manufacturing output and subdued farm sector activity pulled down India’s gross domestic product (GDP) growth to over six-year low of 5 per cent in the April-June quarter of 2019-20, according to official data released on Friday. 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.
The previous low in GDP growth was recorded at 4.3 per cent in January-March quarter of 2012-13.India’s economic growth stood at 8 per cent in the same quarter of 2018-19. “GDP at Constant (2011-12) Prices in Q1 of 2019-20 is estimated at Rs 35.85 lakh crore, as against Rs 34.14 lakh crore in Q1 of 2018-19, showing a growth rate of 5 percent,” the National Statistical Office (NSO) said in a statement.
Gross Fixed Capital Formation (GFCF), which is a barometer of investment, at constant (2011-12) prices was estimated at Rs 11.66 lakh crore in the first quarter as against Rs 11.21 lakh crore a year ago.
In terms of GDP, GFCF at current and constant prices during the first quarter was estimated at 29.7 per cent and 32.5 per cent respectively, as against 30 per cent and 32.8 per cent a year ago.
The Reserve Bank had marginally lowered the GDP growth projection for 2019-20 to 6.9 per cent from 7 per cent projected earlier in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.
“Real GDP growth for 2019-20 is revised downwards from 7 per cent in the June policy to 6.9 per cent – in the range of 5.8-6.6 per cent for first half of 2019-20 and 7.3-7.5 per cent for the second half – with risks somewhat tilted to the downside,” RBI had said in its monetary policy statement. China’s economic growth was 6.2 per cent in April-June quarter of 2019, which was its weakest expansion in 27 years.