Home Business GDP at 4.5%: ‘Worrying,’ says Manmohan Singh; ‘fundamentals strong,’ counters govt

GDP at 4.5%: ‘Worrying,’ says Manmohan Singh; ‘fundamentals strong,’ counters govt

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NEW DELHI: India’s GDP growth hit an over six-year low of 4.5 per cent in July-September 2019, triggering a war of words between the government and the opposition.

This GDP growth data is the lowest since January-March of 2012-13, when it was registered at 4.3 per cent.

Q2 GDP growth dips further to 4.5% from six-year low of 5% in June quarter

India’s gross domestic product growth (GDP) for the second quarter slumped to 4.5% from 5% in the previous June quarter, as per govt data. The GDP figure is a culmination of several months of downbeat figures, from weak consumer demand and private investment to shrinking factory output and an export slump. GDP growth stood at 7% for the same quarter last year.

While the opposition slammed the state of economy, the government said there would be positive changes in the economy from the third quarter.

Reacting to the GDP numbers, former Prime Minister Manmohan Singh said that the state of economy is deeply worrying.

4.5% GDP growth rate unacceptable, worrisome: Manmohan Singh

Delivering his valedictory address at a national conclave on economy, Former PM Manmohan Singh said the gross domestic product (GDP) growth rate of 4.5% was unacceptable and worrisome, and urged his successor Narendra Modi to set aside “deep-rooted suspicion” of society and nurse India back to harmonious, mutually trustworthy society that can help the economy soar.

“GDP figures released today are as low as 4.5 per cent. This is clearly unacceptable. Aspiration of our country is to grow at 8-9 per cent. Sharp decline of GDP from 5 per cent in Q1 to 4.5 per cent in Q2 is worrisome. Mere changes in economic policies will not help revive the economy,” Manmohan said.

new GDP graph

“We need to change current climate in our society from one of fear to one of confidence for our economy to start growing at 8 per cent per annum. State of economy is a reflection of state of its society. Our social fabric of trust and confidence is now torn and ruptured,” the former PM added.

Live updates: India’s economic growth falls to 4.5%

The government countered opposition criticism and stated that the GDP growth is expected to pick up from 3rd quarter of FY 2019-20.

“We take note of announcement of the rate of GDP growth. The fundamentals of Indian Economy remain strong. GDP growth is expected to pick up from 3rd quarter of FY 2019-20,” the finance ministry tweeted quoting department of economic affairs secretary Atanu Chakraborty.

He also said that IMF has projected India’s GDP growth at 6.1 per cent in FY 2019-20 and 7 per cent in FY 2020-21 in it’s October, 2019 report on World Economic Outlook.

Core sector output shrinks 5.8% in October

Output of eight core infrastructure industries contracted by 5.8 per cent in October, indicating the severity of economic slowdown, according to the government data released on Friday.

The growth dragged mainly by deceleration in manufacturing output and subdued farm sector activity. According to the data released by National Statistical Office (NSO), the gross value added (GVA) growth in the manufacturing sector contracted by 1 per cent in the second quarter of this fiscal from 6.9 per cent expansion a year ago.

Similarly, farm sector GVA growth remained subdued at 2.1 per cent, down from 4.9 per cent in the corresponding period of the previous fiscal.

Here are some more reactions on the falling GDP numbers:

Congress’ chief spokesperson Randeep Surjewala slammed the Centre and stated that “India’s GDP has collapsed to an abysmal 4.5 per cent. We are in a virtual free-fall. This is the lowest GDP quarter in 6 years.”

Trinamool Congress (TMC) leader Derek O’Brien took potshots at finance minister Nirmala Sitharaman over the sliding numbers and wrote on Twitter: “Lowest GDP growth in 26 quarters! No answers from FM. No wonder, full Opposition walked out of Rajya Sabha 40 minutes into the FM’s speech this week. And ministers dozed off in their seats.”

(With agency inputs)





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