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Freefall: Slowdown, pandemic pulls India's FY20 GDP growth rate to 11 yr low
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SME Times News Bureau | 30 May, 2020
The general economic slowdown,
along with the impact of the global Covid-19 pandemic, pulled India's
GDP growth rate down to 3.1 per cent in the last quarter of 2019-20.
The Q4 growth rate was slower than 4.1 per cent in Q3 and 5.7 per cent reported for the like period of the previous fiscal.
Consequently,
India's FY20 GDP declined to 4.2 per cent from 6.1 per cent in FY19.
This is the slowest rate of India's GDP growth in the last 11 years.
However,
the rate, if looked at from the prism of constant prices at 2011-12
prices, would still be the lowest in the last 8 years.
"Real GDP
or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the
year 2019-20 is now estimated to attain a level of Rs 145.66 lakh crore,
as against the First Revised Estimate of GDP for the year 2018-19 of Rs
139.81 lakh crore, released on 31st January 2020," the National
Statistical Office (NSO) said.
"The growth in GDP during 2019-20 is estimated at 4.2 per cent as compared to 6.1 per cent in 2018-19."
"GDP
at Constant (2011-12) Prices in Q4 of 2019-20 is estimated at Rs 38.04
lakh crore, as against Rs 36.90 lakh crore in Q4 of 2018-19, showing a
growth of 3.1 per cent."
On a sequential basis, the quarterly
growth rate has progressively come down from 5.2 per cent in Q1 of
2019-20 to 4.4 per cent in Q2 and 4.1 per cent in Q3.
Last
fiscal, the Indian economy faced a severe demand slowdown on account of
high GST rates, farm distress, stagnant wages and liquidity constraints.
Additionally, the national lockdown implemented to curb the Covid-19 outbreak has dealt a severe blow to the economy.
However, the NSO said that these estimates on quarterly as well as annual basis are likely to undergo revisions.
"In
view of the global Covid-19 pandemic and consequent nationwide lockdow
nmeasures implemented since March 2020, the data flow from the economic
entities has been impacted," the NSO said.
"As some of these
units are yet to resume operations and owing to the fact that the
statutory time-lines for submitting the requisite financial returns have
been extended by the government, these estimates are based on the
available data."
Besides, the NSO data showed that Gross Value
Added (GVA) growth rate during the fourth quarter of 2019-20 on a YoY
basis fell to 3 per cent, from 5.6 per cent during the like period of
the previous fiscal.
Similarly, the GVA growth rate during
2019-20 on a YoY basis declined to 3.9 per cent, from 6 per cent during
the like period of 2018-19.
The GVA includes taxes but excludes subsidies.
As
per the estimates, the growth in the 'agriculture, forestry and
fishing' is estimated to be 5.9 per cent from YoY growth of 1.6 per cent
and 'mining and quarrying' of 5.2 per cent from (-) 4.8 per cent.
On
the other hand, 'manufacturing' is (-) 1.4 per cent from a YoY rise of
2.1 per cent and construction activity plunged by (-) 2.2 per cent from
6 per cent.
Furthermore, the GVA growth rate of 'electricity,
gas, water supply & other utility services', 'trade, hotels,
transport, communication and services related to broadcasting',
'financial, real estate and professional services' and 'public
administration, defence and other services' respectively also declined
during this period.
Another key growth gauge -- Gross Fixed
Capital Formation -- which underscores the overall acquisition of
produced assets in the economy, at constant (2011-2012) prices, is
estimated to have declined to 28.8 per cent from a YoY rise of 31.7 per
cent in Q4 of 2018-19.
For 2019-20, the GFCF fell by (-) 2.8 per cent from a YoY rise of 9.8 per cent in the previous fiscal.
Commenting
on the GDP data, D.K. Aggarwal, President, PHD Chamber of Commerce and
Industry, said: "We are optimistic that the growth will revive in the
second half of the financial year 2020-21 on the back of various reform
measures announced by the Government during the last few weeks."
India
Ratings & Research's Chief Economist Devendra Kumar Pant said:
"From production side, the growth was driven by agriculture and public
administration. Government expenditure has helped both GVA and GDP
growth."
"Going forward, with private expenditure growth
dwindling due to the shutdown and labour migration, investment demand
contracting due to weak consumption demand and stretched corporate
balance sheet, government expenditure will again be the growth engine in
FY21."
According to Suman Chowdhury, Chief Analytical Officer,
Acuite Ratings & Research: "The figures for FY20 largely reflect the
intensification of the economic slowdown that started to build up from
Q2/Q3 of FY19. The gradual slowdown in the growth trajectory is
indicated in the revised quarterly GDP figures and the estimated print
for FY20 at 4.2 per cent as compar ed to 6.1 per cent in FY19."
"Clearly,
the growth momentum got further dampened towards the year end due to
the economic disruption from the virus outbreak that already started a
couple of weeks before the onset of the pan India lockdown in the last
week of March."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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