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After 6-Year Low In GDP Growth In October-December, Government Sees Rebound Ahead
GDP growth revised to 5.1% in July-September, 5.6% in April-June Official data shows consumer demand, private investment, exports struggle Government sees annual growth to rise from 5% in 2019-20 to 6% next year
28 Feb 2020, 06:04 PM IST 
- The GDP growth rate in the December quarter matched the forecast of analysts in a poll by news agency Reuters, but was below a revised 5.1 per cent growth rate for the previous quarter.
- The official data showed consumer demand, private investment and exports all struggling, while higher government spending and an improvement in rural demand lent support.
- The figure for the July-September period was revised to 5.1 per cent from 4.5 per cent, according to the statistics ministry statement. Also, the estimate of GDP expansion in the first quarter of 2019-20 (April-June) was revised to 5.6 per cent from 5 per cent.
- “The upward revisions in historical data present a complicated picture of growth, even though high frequency data is improving,” said Rahul Bajoria, chief India economist at Barclays. “We reckon a modest recovery continues to stay intact, and will gather some more steam in coming months despite mounting global risks.”
- Prime Minister Narendra Modi's government took several steps earlier this month to try to bolster economic growth, including increasing state spending on infrastructure.
- But many economists expect the impact of those efforts to be outweighed by the global fallout from the coronavirus epidemic that began in China.
- The government is targeting only a slight recovery in growth to 6 per cent for 2020-21, from a more than 11-year low rate of 5 per cent this financial year, far below the level needed to generate jobs for millions of young workers entering the labour market each month.
- The Finance Minister had earlier maintained that the fundamentals of the economy remain strong, and that she was not closing the door on additional steps to support it.
- The Reserve Bank of India (RBI) had kept the repo rate unchanged at 5.15 per cent in a bid to combat consumer inflation, and projected a GDP growth rate of 6 per cent for the financial year starting April 1 while retaining the estimate for the current financial year at 5 per cent.
- India lost its position as the world's fastest-growing major economy last year. The government has set a target of making the country a $5-trillion economy by 2024.