GDP growth slows to 5-yr low; unemployment rate at 45-year high

PTI, Jun 1, 2019, 10:33 AM IST

New Delhi: In a bad news for the new government on day one, CSO data showed that economic growth slowed to a 5-year low of 5.8 per cent in the fourth quarter of 2018-19, pushing India behind China, due to poor showing by agriculture and manufacturing sectors.

The Central Statistics Office (CSO) released a worrisome set of data on rate of unemployment for 2017-18, confirming the pre-election leaked report’s claim of joblessness at a 45-year high of 6.1 per cent.

Chief Statistician Pravin Srivastava, however, emphasised that the latest labour survey cannot be compared with previous ones and said that he doesn’t want to “claim that is 45-year low or high” as it is a different matrix.

The growth of the eight core sector industries during April too witnessed a slowdown. The expansion was at the rate of 2.6 per cent. These industries contribute about 40 per cent to the overall factory output of the country.

There was, however, some relief on the front of government finances as the fiscal deficit for 2018-19 remained within the revised Budget target of 3.4 per cent of the GDP.

Meanwhile, the government announced a slew of measures like extending the Rs 6,000 annual support to all farmers besides a pension scheme for farmers to bolster the agriculture sector.

Commenting on the GDP data, Economic Affairs Secretary S C Garg said the slowdown in the fourth quarter of the last fiscal was due to temporary factors like stress in NBFC segment. He also underscored that the economic activity may also remain sluggish during April-June quarter of the current fiscal before picking up in the subsequent months.

The CSO data on national income revealed that the annual Gross Domestic Product (GDP) for fiscal 2018-19 (at 2011-12 prices) too was at a five-year low of 6.8 per cent. The GDP growth was 7.2 per cent in 2017-18.

Garg said that on the basis of annual growth rate of even 6.8 per cent, India continues to remain the world’s fastest growing major economy.

The GDP in the fourth quarter of the fiscal ending March 2019 was 5.8 per cent, lower than 6.4 per cent growth posted by China in January-March 2019 quarter, thus losing the world’s fastest major economy tag.

The CSO data showed that Gross Value Addition (GVA) decelerated to 5.7 per cent in fourth quarter from 7.9 per cent in January-March 2017-18.

The decline in the economic activity has been mainly on account of steep decline in growth in agriculture and manufacturing sectors.

The GVA in agriculture, forestry and fishing sectors contracted by 0.1 per cent as against an expansion of 6.5 per cent recorded in fourth quarter of 2017-18.

The slowdown was quite steep in the key manufacturing segment as the GVA expansion was meagre 3.1 per cent down from 9.5 per cent during fourth quarter of 2017-18.

The ‘financial, real estate and professional services’ segment, however, showed improvement with the growth rate moving up to 9.5 per cent in the last quarter of 2018-19 from 5.5 per cent in the comparable period of the preceding fiscal.

On annual estimates of expenditures of GDP, 2018-19, the CSO said the rates of Private Final Consumption Expenditure (PFCE) at current and constant (2011-12) prices during 2018-19 are estimated at 59.4 per cent and 56.9 per cent, respectively, as against the corresponding rates of 59 per cent and 56.3 per cent, respectively in 2017-18.

In terms of GDP, the rates of Gross Fixed Capital Formation (GFCF) at current and constant (2011-12) prices during 2018-19 have been estimated at 29.3 per cent and 32.3 per cent, respectively, as against the corresponding rates of 28.6 per cent and 31.4 per cent, respectively, in 2017-18.

As per the CSO, India’s per capita income estimated to have risen by 10 per cent to Rs 10,534 a month during fiscal ended March 2019, government data on national income showed Friday.

In preceding fiscal 2017-18, the monthly per capita income stood at Rs 9,580.

The per capita income at current prices during 2018-19 is estimated to have attained a level of Rs 1,26,406 (Rs 10,533.83 monthly) as compared to the estimated for the year 2017-18 of Rs 1,14,958 (Rs 9,579.83 a month).

As per the periodic labour force survey released by the CSO, the unemployment rate was 6.1 per cent during 2017-18.

Chief Statistician Pravin Srivastava, however, played down the latest survey saying it cannot be compared with previous surveys.