The Hardship Continues

The third quarter of any FY which ends on December 31, generally records a brisk pick up in Indian economic growth, due to the Diwali season

Mumbai: The NSO yesterday released the GDP growth figures of the Indian economy for the December 2019 quarter and as has been widely predicted by the markets and the experts, they indicate a worrisome continuation of the chronic economic slowdown that the Indian economy faces. The Indian economy has lost its tag of being the world’s fastest-growing large economy and recorded a growth rate of a mere 4.7%, the lowest in about 7 years now. The third quarter of any FY which ends on December 31, generally records a brisk pick up in Indian economic growth, due to the Diwali season, the Kharif harvest and the onset of the grand great Indian wedding season, but that did not happen this time, despite the bountiful monsoon that we had. Leading the slowdown in the Indian economy were a negative growth in manufacturing and electricity sectors and a mere 0.3% growth in the construction sector. Due to that despite a rise in farm output due to a good monsoon and a continued growth of 6% in the services sector, the overall GDP growth remained tepid in the December quarter. Investment continued to decline, there was no impressive growth in private consumption and due to the contraction in tax collections, government spending was restrained. The NSO thus predicts that the GDP growth for the March 2020 quarter will be a mere 4.6%, which is a matter of huge concern since the last quarter of the FY normally records the highest economic growth and the current FY will end with a GDP growth rate of a mere 5%, the lowest since the global economic crisis in 2008-09.

The indicators thus are that the economic slowdown will continue for the coming quarters.