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India's GDP growth slows down to 6.6% in December quarter, fails to meet expectations

India's GDP growth was revised down to 7 per cent from 7.1 per cent in the second quarter ended September 30, 2018, according to data released by the Ministry of Statistics and Programme Implementation.

twitter-logo BusinessToday.In   New Delhi     Last Updated: February 28, 2019  | 19:01 IST
India's GDP growth slows down to 6.6% in December quarter, fails to meet expectations
India's GDP growth has slowed down to 6.6 per cent in the December quarter, as per the latest government data.

India's GDP growth has slowed down to 6.6 per cent in the December quarter, as per the latest government data. The growth rate is below expectations. A Reuters poll had anticipated a GDP growth of 6.9 per cent.

India's Gross Domestic Product (GDP) growth was revised down to 7 per cent from 7.1 per cent in the second quarter ended September 30, 2018, according to data released by the Ministry of Statistics and Programme Implementation.

However, India pips China to retain the tag of the world's fastest growing large economy. The Chinese economy grew at 6.4 per cent in the third quarter. 

The growth in GDP during 2018-19 is estimated at 7 per cent as compared to the growth rate of 7.2 per cent in 2017- 18, the Ministry of Statistics said.

Last month, the Central Statistics Office (CSO) has projected Indian economy to grow at 7.2 per cent for this fiscal under its first advance estimates.

"Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2018-19 is likely to attain a level of Rs 141.00 lakh crore, as against the First Revised Estimate of GDP for the year 2017-18 of Rs 131.80 lakh crore, released on 31st January 2019," CSO said.

The per capita income in real terms (at 2011-12 prices) during 2018-19 is likely to attain a level of Rs 92,718 as compared to Rs 87,623 for the year 2017-18. The growth rate in per capita income is estimated at 5.8 percent during 2018-19, as against 5.7 per cent in the previous year.

Meanwhile, the Reserve Bank of India has pegged GDP growth at 7.4 per cent in 2018-19. For the next financial year, the RBI has projected GDP growth to be in the range of 7.2-7.4 per cent for the first half, and 7.5 per cent in the third quarter, with risks somewhat to the downside.

Under Prime Minister Narendra Modi's regime, the highest GDP growth rate was registered at 9.2 per cent in January-March quarter of FY18, while the lowest at 5.6 per cent (revised) in July-September quarter of FY18.

The next release of quarterly GDP estimate for the March quarter and provisional annual estimates for the year 2018-19 will be on May 31, 2019.

Industry Analysis

The sectors which are likely to register growth rate of over 7 per cent are construction, public administration, defence and other services, manufacturing, electricity, gas, water supply and other utility services and financial, real estate and professional services.

The growth in the agriculture, forestry and fishing, mining and quarrying and trade, hotels, transport, communication and services related to broadcasting is estimated to be 2.7 per cent, 1.2 per cent and 6.8 per cent, respectively.

Agriculture

Gross Value Added (GVA) at basic prices for 2018-19 from agriculture, forestry and fishing sector is estimated to grow by 2.7 per cent as compared to growth of 5.0 per cent in 2017-18.

Mining and Quarrying

The growth in the GVA at basic prices for 2018-19 from mining and quarrying sector is estimated to be 1.2 per cent as compared to growth of 5.1 per cent in 2017-18. The key indicators of mining sector, namely, production of coal, crude oil and natural gas registered growth rates of 7.8 per cent, (-) 3.7 per cent, (-) 0.2 per cent during April-December, 2018-19 as compared to 1.5 per cent, (-) 0.4 per cent and 3.4 per cent during April-December, 2017-18.

IIP mining grew by 3.1 per cent in April-December, 2018-19 as against 2.8 per cent in April-December, 2017-18.

Manufacturing

The growth in the GVA at basic prices for 2018-19 from manufacturing sector is estimated to be 8.1 per cent as compared to growth of 5.9 per cent in 2017-18.

Electricity, Gas, Water Supply and Other Utility Services

GVA at basic prices for 2018-19 from electricity, gas, water supply and other utility services sector is estimated to grow by 8.0 per cent as compared to growth of 8.6 per cent in 2017- 18.

Construction

GVA at basic prices for 2018-19 from construction sector is estimated to grow by 8.9 per cent as compared to growth of 5.6 per cent in 2017-18.

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Edited by Chitranjan Kumar

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