The rate of gross domestic product (GDP) growth in the January-March quarter of 2018-19 slipped to 5.8 per cent, mainly due to a slowdown seen in the country’s key sectors like agriculture, industry and manufacturing in the past nine months.
The economic growth rate for the full 2018-19 financial year stood at a 5-year low of 6.8 per cent, showed data released by the Central Statistics Office (CSO) today.
This also means that India lost its spot as the fastest growing major economy to China. China's economy logged a growth of 6.4 per cent in the March quarter. Growth has fallen below China for the first time in many years.
However the country’s fiscal deficit in full 2018-19 stood at 3.4 per cent of GDP, roughly in line with the Interim Budget estimate.
Weaker domestic consumption, waning global growth and an escalating U.S.-China trade war are key factors behind the sub-7 percent growth.
Several indicators - automobile sales, rail freight, petroleum product consumption, domestic air traffic and imports indicate a slowdown in domestic consumption.
Corporate earnings hit a six-quarter low growth of 10.7% during January-March quarter on weakening consumer sentiment and softening commodity prices, ICRA, the Indian arm of the ratings agency Moody's said on Tuesday, citing a sample of over 300 companies.
This then means that the new Finance Minister of India, Mrs. Niramal Seetharaman has her work cut-out. The expectations are
a) A cut in interest rates
b) Increase Govt Spending to the extent possible
c) Tax sops - to individuals and companies to increase spending
But some economists believe the above steps could have a limited impact.
They fear the economy is in danger of a prolonged phase of slower growth due to stagnant rural wages, rising real interest costs for manufacturers and reluctance to lend among banks and non-bank finance firms due to alarmingly high defaults.
Then the Govt will need to push long pending reforms, related to land acquisition and labour, during the coming year, though it will have to coordinate with state governments.
(Disclaimer : For information only and not to recommend investing in any manner)
The economic growth rate for the full 2018-19 financial year stood at a 5-year low of 6.8 per cent, showed data released by the Central Statistics Office (CSO) today.
This also means that India lost its spot as the fastest growing major economy to China. China's economy logged a growth of 6.4 per cent in the March quarter. Growth has fallen below China for the first time in many years.
However the country’s fiscal deficit in full 2018-19 stood at 3.4 per cent of GDP, roughly in line with the Interim Budget estimate.
INDIA - Quarterly GDP growth
(Source NDTV.com)
Weaker domestic consumption, waning global growth and an escalating U.S.-China trade war are key factors behind the sub-7 percent growth.
Several indicators - automobile sales, rail freight, petroleum product consumption, domestic air traffic and imports indicate a slowdown in domestic consumption.
Corporate earnings hit a six-quarter low growth of 10.7% during January-March quarter on weakening consumer sentiment and softening commodity prices, ICRA, the Indian arm of the ratings agency Moody's said on Tuesday, citing a sample of over 300 companies.
This then means that the new Finance Minister of India, Mrs. Niramal Seetharaman has her work cut-out. The expectations are
a) A cut in interest rates
b) Increase Govt Spending to the extent possible
c) Tax sops - to individuals and companies to increase spending
But some economists believe the above steps could have a limited impact.
They fear the economy is in danger of a prolonged phase of slower growth due to stagnant rural wages, rising real interest costs for manufacturers and reluctance to lend among banks and non-bank finance firms due to alarmingly high defaults.
Then the Govt will need to push long pending reforms, related to land acquisition and labour, during the coming year, though it will have to coordinate with state governments.
(Disclaimer : For information only and not to recommend investing in any manner)
