GDP growth at 4.2% for FY 2019-2020

Central Statistics Office (CSO) on Friday released the GDP data for the fourth quarter of the FY 2019-2020. The data recorded slow growth of 3.1% for the fourth quarter of the FY 2019-2020. The growth in the previous quarter Q3 FY 2019-2020 was 4.7%. The overall growth for the FY year 2019-2020 was 4.2% as compared to 6.1% in FY 2018-2019.

The Reserve Bank of India (RBI) estimated at 5% for the previous financial year. NSO estimated similar growth in its first and second advance estimates released earlier this year.

In gross value added terms the Indian economy grew by 3% in Q4 vs 4.5% in Q3.

Sector-wise growth rates

Financials and realty sectors growth was at 2.4%. Trade, telecom, transport, hotels growth at 2.6%. Manufacturing growth at 0% for the FY 2019-2020 vs 5.7% for the previous year.

The April core sector growth was -38.1% vs -9% in March. This is the worst performance since 2005.

The coal sector output down 15% year on year. Cement and steel sector output down by more than 80%. Fertilizer, crude oil, natural gas output were also down by 4.5%, 6.4%, and 19.9% respectively.

Index for Industrial Production is also expected to contract due to the fall in the core sector output.

Deficits and Estimates

The increased borrowing due to the COVID-19 pandemic is expected to increase the fiscal deficit of the government. The FY20 revenue deficit at 6.67 lakh crore vs 5 lakh crore target. This FY 20 fiscal deficit stood at 4.59% of GDP. The fiscal deficit in absolute terms for FY20 was at 9.35 lakh crore vs 7.66 lakh crore. The April- March budget deficit reaches 122% of the FY20 target. The FY20 tax revenue stood at Rs.20 lakh crore vs Rs.21.63 lakh crore target.

Further revisions to GDP data were also released

  1. The growth for Q1 was revised from 5.6% to 5.2%
  2. Q2 revised from 5.1% to 4.4%
  3. Q3 revised from 4.7% to 4.1%

The government also mentioned that the GDP data are subject to further revisions.

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