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GDP growth plunges to 4.5%
Why is it in the news?
- India’s gross domestic product (GDP) grew 4.5 percent in July-September 2019, the lowest since the fourth quarter of 2012-13.
- This is indication of deepening slowdown in the economy.
- Households aren't spending enough to buoy demand and companies aren't adding capacities or hiring more.
More in the news
- Gross Value Added (GVA):
(1) It grew 4.3 percent in July-September 2019.
(2) It is GDP minus taxes and is seen as a more realistic gauge to measure economic activity.
- The farm sector:
(1) The sector saw growth coming in at 2.1% in second quarter of this year compared with 4.9% in Q2 of last year.
(2) It is reflecting the very late arrival of monsoon rains this year, affecting sowing in the summer kharif crop, India's main harvest.
- The manufacturing sector:
(1) The sector accounts for about 75 percent of the country's factory output, contracted 1 percent in July-September 2019.
(2) People are putting off purchases on aspirational items such as cars and televisions.
- The services sector:
(1) Among the services measured, only the ‘Public Administration, Defence & Other Services’ category saw growth quicken in the second quarter of this year, to 11.6%.
(2) The ‘Financial, Real Estate & Professional Services’ category saw growth slow to 5.8% in Q2 of 2019-20, compared with 7% in Q2 of the previous year.
- Core Sector:
(1) Output of eight core infrastructure industries contracted by 5.8% in October, indicating the severity of economic slowdown.
- Private final consumption expenditure (PFCE), a proxy to measure household spending, grew 5.06 percent (at constant) prices in July-September 2019 compared to 9.8 percent in the same quarter last year.
- Gross fixed capital formation, which is a measure of the level of investment in the country by both the government and the private sector, grew only 1.02%.
Source
The Hindu.