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COLUMN

What went wrong

with Indian economy?

NEWS & India’s economic growth has slipped further to hit a six-year low of
4.5% per cent in July-September quarter amid no immediate sign of
VIEWS recovery unless major reforms are introduced and implemented

BHARAT HITESHI
t’s now official now! The Indian September 2019), the economic growth
Hiteshi is an economy is suffering through a came to 4.8 per cent, against 7.5 per cent
independent journalist- major slowdown, and one that in the same period last year.
turned-author and a shows no immediate sign of In another sign of pain in the
political commentator. I recovering unless the present economy, official data released recently
The views expressed government reinvents itself. India’s showed that India’s fiscal deficit in the
are his own economic growth has slipped further to first seven months through October
hit an over six-year low of 4.5 per cent in stood at 7.2 trillion, or 102.4 per cent
July-September, according to official data of the budgeted target for the current
released on November 29, 2019. The pre- financial year. Besides, the output of
vious low was recorded at 4.3 per cent eight core infrastructure industries in
in the January-March period of 2012-13. the economy contracted by 5.8 per cent
During the six-month period (April-Sep- in October, indicating the severity of the
tember 2019), the Indian economy grew economic slowdown, another set of of-
4.8 per cent as against 7.5 per cent in the ficial data showed.
same period a year ago. By comparison, In view of slowing rates of growth, the
China’s economic growth was 6 per cent Reserve Bank of India (RBI) had earlier
in July-September 2019, which was the lowered its GDP growth projection for
weakest expansion in over 27 years. full 2019-20 financial year to 6.1 per cent
India’s July-September 2019, gross from 6.9 per cent forecast previously.
domestic product (GDP) growth rate fell The GDP growth rate this year is the
to 4.5 per cent, the lowest in more than lowest quarterly rate since the 4.3 per
six years, compared with 7.5 per cent in cent clocked in January-March quarter
the same quarter of 2018-19, government of 2012-13 when India had been bat-
The low rate data showed. The low rate of expansion tling high inflation and political turmoil,
was mainly on account of a weak manu-
besides global economic pressures.
of expansion facturing, falling consumer demand to know why it had happened. Experts
While there is no particular study
and private investment, and a drop in
was mainly on exports due to a global slowdown. In the point out that investment had dried up
account of a weak previous quarter (April-June 2019), the and it contracted a meager 3 per cent
country’s economic growth had stood at
in real terms last quarter, after growing
manufacturing, a seven-year low of 5 per cent, against 8 almost 12 per cent in the same quarter
falling consumer per cent growth during the same period last year.
Has India dropped out of that group of
a year earlier.
demand and Gross value added (GVA) growth dur- fast-growing emerging economies? For-
private ing the second quarter stood at 4.3 per mer prime minister Manmohan Singh
said the GDP growth rate of 4.5 per cent
cent, against 4.9 per cent in April-June
investment and this year and 6.9 per cent in the Septem- was unacceptable and worrisome, and
a drop in exports ber quarter last year. Gross fixed capital urged his successor Prime Minister to set
formation at current prices declined
aside “his deep-rooted suspicion” of soci-
due to a global sharply to 1.02 per cent, compared with ety and nurse India back to harmonious,
mutually trustworthy society that can
11.8 per cent in the same quarter last year.
slowdown For the first six months of the year (April- help the economy soar. Delivering his
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