India's GDP growth slips below 6%; stands at 5.8% in Q4

India’s GDP Growth Slumps to 5.8% in Fourth Quarter

India’s GDP Growth Slumps to 5.8% in Fourth Quarter

India's GDP or gross domestic product grew 5.8 per cent in the January-March period, government data showed on Friday.

Asked about India losing the fastest growing nation tag to China with a quarterly growth of 5.8%, Mr. Garg, who is also the Finance Secretary, said, "Quarterly numbers don't is basically annual growth..."

The CSO data also revealed that the GDP growth during 2018-19 fiscal year had consistently experienced a downward trend clocking an average of 6.8 percent, lower than 7.2 per cent in the previous financial year. In March quarter a year ago, Indian GDP grew at 8.1 per cent.

"Slow down in the fourth quarter (of 2018-19) GDP was due to temporary factors like stress in NBFC sector affecting consumption finance". In 2017-18, GDP growth came in at 7.2 per cent.

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An industry analysis showed all sectors except manufacturing, construction, and financial, real estate and professional services to experience slowdown during the fiscal.

Economic slowdown could pose the biggest challenge for the Modi 2.0 team going by the GDP growth data released by the Central Statistics Office (CSO) on Friday. The public administration, defence and other services sector has shown a growth rate of 8.6 percent as against previous year's growth rate of 11.9 per cent. The sub-6 percent growth of Q4 is the slowest in five years.

Most economists are now predicting a 25-50 basis points rate cut in the upcoming monetary policy review of the Reserve Bank of India in June to provide an impetus to growth, though so far banks have failed to pass on the benefits of the lower rates to customers. The mining and quarrying sector grew at just 1.3% compared to 5.1% in the previous financial year. This marked a growth of 6.9%, compared to 7.2% in 2017-'18.

Although in absolute terms the fiscal deficit has gone up, but as a percentage of GDP the deficit figure has come down marginally, mainly on account of GDP expansion in 2018-19.

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