New Delhi: It now seems official that the Indian economy is slowing down. The latest gross domestic product (GDP) data has confirmed what was considered to be a base-less forecast about the economic growth rate have become a reality. According to the Central Statistics Office (CSO) data released on Friday, the Indian economy growth fell to five per cent for April -June quarter of 2019-20 financial year and this is a seven-year low from 4.9 per cent growth rate recorded in April-June quarter of the 2012-13 financial year.
The GDP growth rate in the previous quarter, i.e. January-March was 5.8 per cent and eight per cent in the April-June quarter of 2018-19 fiscal. The economic slowdown was due to a sharp deceleration in the manufacturing sector and sluggish agriculture output, according to official data.
The Reserve Bank of India (RBI) had marginally lowered the GDP growth projection for 2019-20 to 6.9 per cent from seven 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 seven per cent in the June policy to 6.9 per cent – in the range of 5.8-6.6 per cent for the first half of 2019-20 and 7.3-7.5 per cent for the second half – with risks somewhat tilted to the downside,” RBI in a statement said.
On the other side, China’s economic growth was 6.2 per cent in the April-June quarter of 2019, which was the weakest expansion in 27 years. According to the CSO data, the manufacturing sector grew 0.6 per cent as against 12.1 per cent in the first quarter of 2018-19. Agriculture and allied sectors grew by two per cent as compared to 5.1 per cent in the previous corresponding quarter.
Industrial production grew 3.6 per cent in the first quarter as against the 5.1 per cent in the previous corresponding quarter. Automobile sales, rail freight, domestic air traffic and imports point to a slowdown in domestic consumption. The domestic passenger vehicle industry recorded a drop of 31 per cent in sales, the worst performance in the past 19 years. RBI had cut the key lending rates for four times in a row by a total of 110 basis points (1.1 per cent).