The Centre’s Narendra Modi government on Friday faced a real crisis in hands after the GDP data for the first quarter of the financial year 2019-20 showed the economy grow by just 5%. This was less than 5.8% quarterly growth registered in the last quarter of the previous financial year and 8% that the Indian economy registered in the first quarter of the last financial year.
The latest revelation has officially confirmed that the country’s economy was facing its worst and most prolonged slowdown in six years. The economic growth for the quarter ending March 2013 had stood at 4.3%.
The latest revelation on the GDP is lower than even the forecast made by a group of economists, who had predicted the country’s GDP to grow by 5.7%.
One of the reasons behind the huge slump in the economy is the weak consumer demand and dip in private investments. Meanwhile, India Ratings and Research (Fitch Group) has revised India’s FY20 gross domestic product (GDP) growth downwards to 6.7% from its earlier forecast of 7.3%.
Only a week ago, according to PTI, Moody’s Investors Service had cut India’s GDP growth forecast for 2019 calendar year to 6.2% from the previous estimation of 6.8%. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7%.
KV Subramanian, whose Twitter bio describes him as Chief Economic Advisor, wrote, “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.”
The government has, so far, been in a denial mode rejecting any suggestions of a slowdown in the economy. The latest revelation on the GDP must worry the government.