SME Times is powered by   
Search News
Just in:   • Adani Group to invest Rs 57,575 crore in Odisha  • 'Dollar Distancing' finally happening? Time for India to pitch Rupee as credible alternative: SBI Ecowrap  • 49% Indian startups now from tier 2, 3 cities: Jitendra Singh  • 'India ranks 3rd in global startup ecosystem & number of unicorns'  • LinkedIn lays off entire global events marketing team: Report 
Last updated: 05 Mar, 2019  

GDP.Q3.9.Thmb.jpg Renewed growth concerns

   Top Stories
» 49% Indian startups now from tier 2, 3 cities: Jitendra Singh
» 'India ranks 3rd in global startup ecosystem & number of unicorns'
» Tripura exported over 9K tonnes of pineapples in 2 years
» CPI inflation eases to 6.71% in July, IIP falls to 12.3%
» Rupee depreciates 12 paise to close at 79.64 against US dollar
Bikky Khosla | 05 Mar, 2019

The government last week cut the Gross Domestic Product (GDP) growth estimates for 2018-19 to 7 percent, down from the 7.2 percent attained during the previous financial year. These figures are worrisome. Unlike several previous forecasts made by economists, these estimates clearly point to a loss in growth momentum. Additionally, the five quarter-low 6.6 percent GDP growth rate for the October-December quarter--as shown by the latest figures-- further enhances this concern.

A deeper look at the last week GDP figures shows that farm sector growth is seen at a slower pace at 2.7 percent vs. estimate of 3.8 percent earlier. Similarly, Industry growth is seen slightly slower at 7.7 percent against 7.8 percent estimate earlier while services growth estimate is marginally revised upwards to 7.4 percent. It is, however, good to see gross fixed capital formation or investment growth picking up to 10 percent in FY19 from 9.3 percent in FY18.

Meanwhile, core sector data for January, 2019, released last week by the Commerce Ministry, showed huge deceleration. The output pace of these eight major industries slumped to 1.8 percent in the month, with two largest contributing sectors of electricity and refinery products performing poorly. The index had risen by 6.2 percent during the same period last year. Needless to say, this 19-month low core sector data is worth raising concern.

In the above scenario, it is quite clear that the RBI made the right call last month by changing its policy stance back to "neutral" from "calibrated tightening". If inflation remains under control, there could be a case for RBI to cut rates in the coming days. At the same time, it is equally important that the government urgently takes policy action to arrest likely slowdown in consumption demand. Also, reforms must be carried on to spur activity in all sectors that are currently under-performing.

I invite your opinions.

Print the Page
Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.85 56.85
As on 13 Aug, 2022
  Daily Poll
PM Modi's recent US visit to redefine India-US bilateral relations
 Can't say
  Commented Stories
» GIC Re's revenue from obligatory cession threatened(1)
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter