India’s GDP growth slips to slowest in more than six years

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India’s GDP growth slips to slowest in more than six years

The growth on a year-on-year basis during Q2 2018-19 had stood at 7 per cent

Friday November 29, 2019 6:40 PM, ummid.com with inputs from IANS

New Delhi: A massive contraction in manufacturing, agriculture and mining activity pulled India's GDP growth rate down to 4.5 per cent in the second quarter ended September 2019-20.

This is the fifth successive quarter of decline and the slowest GDP growth rate over six years. The growth on a year-on-year basis during Q2 2018-19 had stood at 7 per cent.

On a sequential basis, the growth rate came lower than the 5 per cent in Q1 of 2019-20, 5.8 per cent in Q4 2018-19, 6.6 per cent in Q3 2018-19.

The July-September growth rate of Gross Value Added (GVA), which is GDP minus net product taxes, has slowed to 4.3 per cent as against 6.9 per cent a year ago. With this, the GDP growth rate for April-September, the first half of this fiscal, stands at 4.8 per cent as against 7.5 per cent a year ago.

At present, India's economy faces a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints.

This trend of subdued consumption, referred to as slowdown is being cited by economy watchers as the prime reason for the successive fall in GDP growth rate.

Consequently, all the major sector's including automobile, capital goods, banks, consumer durables, FMCG and real estate have been heavily battered.

In terms of production, the output of manufacturing, mining and electricity generation among others have plunged causing job losses.

The economic growth has been sliding sharply in recent quarters, prompting the government to announce a series of measures including a mega corporate tax reduction to boost economic expansion.

Interestingly, only two days agom Union Finance Minister Nirmala Sitharaman while allaying the concerns of opposition parties on economic slowdown had said "nothing to worry about" and "all is well".

At the same time, Sitharaman also said that growth may have come down but it is not recession yet.

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