Government data released on the first day of Narendra Modi’s government showed India’s GDP or gross domestic product grew 5.8 percent between January-March period.
The data made sure India lose the tag as the fastest-growing major economy of the world to China for the first time in one-and-a-half years. China’s economy logged a growth of 6.4 per cent in the March quarter.
The decline in GDP means that the economy grew at 6.8 percent for the full financial year 2018-19. The Finance Secretary Subhash Chandra Garg expects that the April-June economic growth rate could be “relatively slower”.
Mr. Garg added that country’s growth rate was hit due to weak consumption demand and private investment. And this will start turning around from in the July-September quarter once the liquidity improves due to favourable interest rates.
Economists predict that the slower economy growth would result in another rate cut by the central bank in its June policy . The RBI in it’s bi-monthly briefing brought down its projected growth rate for 2019-20 from 7.4 percent to 7.2 percent.
Moreover, the unemployment rate was at 6.1 percent in 2017-18 which is the lowest in 45 years.
The newly appointed Finance Minister, Nirmala Sitharaman is taking over when the economy is not in a great shape and therefore even the Prime Minister would be pinning hopes to turn things around.
Ms. Sitharaman is expected to deliver the budget of the newly elected Modi Government on the 5th of July.
Source : Various