Slowdown Blues: India's GDP tanks to 5.8% in March quarter, loses fastest-growing economy tag to China

Slowdown Blues: India's GDP tanks to 5.8% in March quarter, loses fastest-growing economy tag to China

The latest figures will be a major cause of concern for both the prime minister Modi and Nirmala Sitharaman, who has been appointed as the new Finance Minister

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India reported its lowest GDP growth rate in March quarter of FY19.India reported its lowest GDP growth rate in March quarter of FY19.
BusinessToday.In
  • May 31, 2019,
  • Updated May 31, 2019 8:01 PM IST

Prime Minister Narendra Modi's first day at work in his second tenure has thrown up a tough challenge - the economy is slowing down at a wild pace. The Gross Domestic Product (GDP) estimates for the January-March quarter of financial year 2018-19 was recorded at 5.8 per cent, government data showed. This happens to be lowest growth rate in the past five financial years.

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"GDP at Constant (2011-12) Prices in Q4 of 2018-19 is estimated at Rs 37.20 lakh crore, as against Rs 35.15 lakh crore in Q4 of 2017-18, showing a growth rate of 5.8 percent," the government said in a statement.

This also means India is no longer the fastest growing major economy in the world. China is ahead at 6.4 per cent GDP in the March quarter. India's GDP estimate for the entire financial year 2018-19 was 6.8 per cent.

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On the other hand, the growth in the manufacturing sector is estimated at 6.9 percent as against previous year's growth rate of 5.9 percent. GVA at basic prices for 2018-19 from 'construction' sector is estimated at 8.7 percent as against previous year's growth rate of 5.6 percent. The 'financial, real estate and professional services' sector has shown a growth rate of 7.4 percent as against previous year's growth rate of 6.2 percent.

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Meanwhile, the fiscal deficit for financial year 2018-19 came in at 3.39 per cent of GDP. It was marginally lower than 3.4 per cent estimated in the revised estimates of the Budget, mainly due to increase in non-tax revenue and lower expenditure. In absolute terms, fiscal deficit at the end of March 31, 2019, stood at Rs 6.45 lakh crore as against Rs 6.34 lakh crore in the revised estimates of Budget.

Although in absolute terms the fiscal deficit has gone up, but as a percentage of GDP the deficit figure has come down marginally, mainly on account of GDP expansion in 2018-19.

(Edited by Vivek Punj)

Prime Minister Narendra Modi's first day at work in his second tenure has thrown up a tough challenge - the economy is slowing down at a wild pace. The Gross Domestic Product (GDP) estimates for the January-March quarter of financial year 2018-19 was recorded at 5.8 per cent, government data showed. This happens to be lowest growth rate in the past five financial years.

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"GDP at Constant (2011-12) Prices in Q4 of 2018-19 is estimated at Rs 37.20 lakh crore, as against Rs 35.15 lakh crore in Q4 of 2017-18, showing a growth rate of 5.8 percent," the government said in a statement.

This also means India is no longer the fastest growing major economy in the world. China is ahead at 6.4 per cent GDP in the March quarter. India's GDP estimate for the entire financial year 2018-19 was 6.8 per cent.

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On the other hand, the growth in the manufacturing sector is estimated at 6.9 percent as against previous year's growth rate of 5.9 percent. GVA at basic prices for 2018-19 from 'construction' sector is estimated at 8.7 percent as against previous year's growth rate of 5.6 percent. The 'financial, real estate and professional services' sector has shown a growth rate of 7.4 percent as against previous year's growth rate of 6.2 percent.

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Meanwhile, the fiscal deficit for financial year 2018-19 came in at 3.39 per cent of GDP. It was marginally lower than 3.4 per cent estimated in the revised estimates of the Budget, mainly due to increase in non-tax revenue and lower expenditure. In absolute terms, fiscal deficit at the end of March 31, 2019, stood at Rs 6.45 lakh crore as against Rs 6.34 lakh crore in the revised estimates of Budget.

Although in absolute terms the fiscal deficit has gone up, but as a percentage of GDP the deficit figure has come down marginally, mainly on account of GDP expansion in 2018-19.

(Edited by Vivek Punj)

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