What Does 4.5% GDP Say About The Country’s Economy?
The latest data released by National Statistical Office (NSO) revealed startling details about the country’s GDP. The economy grew at its slowest pace in 26 quarters in the July-September period of the current fiscal.
Highlights of the NSO data
• GDP grew by 4.5% in the September quarter
• It is slower than 5% in the previous quarter
• The manufacturer contracted 1% in September quarter
• Eight core sectors that account for 40% of index of industrial production contracted 5.8% in October
The data shows that the GDP remained slower despite the 4.3% expansion in the January-March quarter of 2012-13.The decline in manufacturing sector is the first in the nine quarters. It highlights lack of demand in the economy. The factory out with the core sector also contracted.
The eight-core sectors coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity witnessed the sharpest slide that shows that the weakness in economy has continued in the third-quarter too.
Political slugfest over economic slowdown
Former PM Manmohan Singh said that 4.5% GDP was unacceptable. But the chief economic adviser Krishnamurthy Subramanian countered that the fundamentals of the economy continued to be strong. Economists also expect the economy to see some growth but they predict the economy to remain around 5.5-5.6% in 2019-20 fiscal year. But it is much lower than the 7% growth estimated earlier this year.
Former finance secretary Subhash Chandra Garg terms the current GDP like a recession than a slowdown for a country that has grown in excess of 7.5% per annum for 20 years.