India’s GDP Growth Hits Over 6-year Low at 4.5%

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Despite all government efforts to arrest slowdown, the Gross Domestic Product continued its downward spiral for the seventh consecutive quarter. — File photo

Caravan News

NEW DELHI — Despite all government efforts to arrest slowdown, the Gross Domestic Product continued its downward spiral for the seventh consecutive quarter, falling to 4.5 per cent in the second quarter (July-September) of the year 2019-20 according to data issued by National Statistical Office released on Friday.

This is the slowest growth rate Indian economy has registered in six and a half years, according to data.

The previous low was recorded at 4.3 per cent in the final quarter (January-March) of 2012-13.

India’s economic growth has taken a hit due to a number of factors – including slowdown in private consumption, investment and export – but the key indicator is lack of credit (money to produce goods) growth and demand in the market. The Narendra Modi government has taken a slew of reforms in recent months to boost credit in the market – focusing on offering incentives to banks to increase lending – but to little avail.

Experts had predicted this outcome over the past few weeks, adding that the worst was yet to come. This seems to be in line with situation on ground as beginning of December quarter has not shown any signs of revival yet.

As per ICRA’s economic review for October, the performance of seven out of 18 economic indicators worsened during the month, while 11 displayed sequential improvement in their year-on-year performance. Things might look up in November on the back of a post-monsoon pickup in production and a favourable base year, the review said.

However, the Department of Economic Affairs Secretary Atanu Chakraborty said: “We take note of announcement of the rate of GDP growth. The fundamentals of Indian economy remain strong. GDP growth is expected to pick up from Q3 of FY 2019-20. IMF has projected India’s GDP growth at 6.1 per cent in FY 2019-20 and 7 per cent in FY 2020-21 in it’s October 2019 report on World Economic Outlook.”

(With media inputs)

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