By Anjana Das
New Delhi, May 30 (IANS) With key sectors like agriculture, industry , manufacturing -in slowdown since the last nine months, GDP growth in the fourth quarter ended may be the fiscal’s lowest at 6.3 per cent in 2018-19, official sources said on Thursday.
The sources also said that for the entire fiscal 2018-19, the GDP growth could slide to 6.8 per cent, which would be lower than the Central Statistics Office’s (CSO) advance estimate of 7 per cent, adding that 7 per cent growth could be difficult even in first quarter of the current fiscal .
The GDP growth during 2017-18 was logged at 7.2 per cent.
The economy grew at 6.6 per cent in the third quarter ending December – the slowest pace in five quarters – while industry chamber Ficci said the bigger worry was that domestic consumption was not growing fast enough to offset a weakening global economic environment.
Industry chamber CII has said that to fire the four engines of consumption, investment, government spending and exports, it is essential to reduce the income tax burden and expand the scope of investment allowance to all sectors.
“The recent signs of slowdown in the economy stem not only from slow growth in investments and subdued exports but also from weakening growth in consumption demand,” it said.
The official CSO figures for the fourth quarter and the full fiscal 2018-19 will be released on Friday.
“”India’s economy appears to have slowed down slightly in 2018-19. The proximate factors responsible for this slowdown include declining growth of private consumption”, Finance Ministry said earlier this month in a monthly report.
The slowdown and the low GDP figures may not come as a surprise since the Finance Ministry has itself said so in its monthly report for March. The report said India’s economy slowed down slightly in the last fiscal due to declining growth in private consumption, slow increase in fixed investment and muted exports.
The report also said that there is slowdown of growth in agriculture.
The country’s gross domestic product (GDP) growth during the last fiscal has not been impressive except in the first quarter which was on account of a high base.
In the October-December quarter, GDP growth had moderated to 6.6 per cent, which was slowest in 5 quarters.
The GDP data for the April-June and July-September quarters were also revised to 8 per cent and 7 per cent, respectively.
The slowdown reached a high point with the country’s industrial output touching a 21-month low in March. Factory output, as measured in terms of the Index of Industrial Production (IIP), had grown by 5.3 per cent in March 2018, according to CSO data.
The GDP growth forecast for 2018-19 had also been revised downwards to 7 per cent from the 7.2 per cent projected earlier.
“On the supply side, the challenge is to reverse the slowdown in growth of agriculture sector and sustain the growth in industry,” the Finance Ministry report said.
In line with declining real GDP growth, private consumption in the fourth quarter of 2018-19 has also declined as reflected in the drop in growth of two-wheeler sales towards the end of the year, the report added.
(Anjana Das can be contacted at [email protected])