India’s economic growth slowed for a fifth straight quarter to 5 per cent in the three months ended June 2019. That’s slower than the 5.8 per cent expansion in the previous quarter, according to latest figures released by the Central Statistics Office.
India’s GDP growth was 8 per cent in the year-earlier quarter and 5.8 per cent in the preceding one. China’s economy grew 6.2 per cent in the June quarter.
The manufacturing sector grew at just 0.6 per cent while ‘Agriculture, Forestry and Fishing’ sector at 2 per cent. The ‘Mining and Quarrying’, ‘Construction’ and ‘Financial, Real Estate and Professional Services’ grew at 2.7 per cent, 5.7 per cent and 5.9 per cent, respectively, during this period.
The RBI had projected India’s GDP growth for FY20 at 6.9 per cent– in the range of 5.8-6.6 per cent for the first half (April-September) of 2019-20 and 7.3-7.5 per cent for the second half (October-March).
Separately, India’s fiscal deficit in the four months through July stood at Rs 5.48 trillion or 77.8 per cent of the budgeted target, for the current fiscal year, separate government data showed.
Net tax receipts in the first four months of the fiscal year were Rs 3.39 lakh crore, while total expenditure was Rs 9.47 lakh crore, government data showed.
Consumption, the bedrock of growth in the past few years, collapsed to an 18-quarter low of 3.1 per cent from 10.6 per cent in the March quarter, pointing to fragile sentiment. Investments grew 4 per cent, up from 3.6 per cent in the previous quarter.
The slowdown in investment and consumer demand derailed manufacturing, which grew just 0.6 per cent. A meagre 2 per cent rise in farm sector added to the demand slowdown.
In the past week, the government has announced a package of measures such as liberalising FDI for select sectors, ensuring flow of credit to non-banks, rollback of a controversial tax surcharge on foreign portfolio investors, more capital for banks and a big-bang bank consolidation.
Automobile sales, a barometer of the economy, have declined sharply in recent months, forcing production cuts and jobs losses. The government has offered incentives on auto purchases to help revive demand. Weak global economy and trade tensions have kept export growth muted.