‘When growth drops precipitously from 7% to 4.5% in four quarters, it is for all practical purposes a recession’ notes T N Ninan.
States are planning to pass resolutions in their legislative assemblies; however, such tactics will be used as the last resort if the Centre continues to stall allocations.
Nirmala Sitharaman said in Lok Sabha that in case of medical emergencies, marriages and other crisis situations, a depositor of the Maharashtra-based PMC Bank can withdraw up to Rs 1 lakh by invoking the ‘hardship provisions’ of the RBI.
Customs sleuths will be posted in London, Hong Kong, Dubai and Brussels in an effort to check trade-based money-laundering among others.
New Delhi: The country’s Gross Domestic Product grew at 4.3 percent in the quarter between July and September, which is the lowest since January-March in 2013 when the GDP grew at 4.3 per cent. The GDP data was even worse than the estimates of 4.7 per cent that the economists expected.
Government of India: 8 core industries output in October declined by 5.8%. pic.twitter.com/VQdeUrlgxT
— ANI (@ANI) November 29, 2019
Government of India: Quarter 2 Gross Domestic Product (GDP) showing a growth rate of 4.5% https://t.co/ysSTQ3rZAH
— ANI (@ANI) November 29, 2019
The GDP numbers were released along with the data for the eight core infrastructure industries, which showed output declining by 5.8 per cent in October. As many as six of the eight core industries saw a contraction in output in October. Coal was the worst hit, declining steeply by 17.6 per cent.
India was the world’s fastest-growing economy until last year, posting quarterly growth rates of as high of 9.4% in 2016.
Chief Economic Advisor KV Subramanian on Gross Domestic Product (GDP) data: We are saying again that the fundamentals of the Indian economy continue to be strong. GDP is expected to pick in Quarter 3. (file pic) pic.twitter.com/6mOst3sec9
— ANI (@ANI) November 29, 2019
In the April-October period, the central government exceeded its annual fiscal deficit target at 102.4% while it exhausted 112.5% of the revenue deficit target, according to data released by Controller General of Accounts.
According to reports, China’s GDP growth slowed to 6% in the September quarter, the weakest quarterly growth rate since 1992, down from 6.2% in the previous quarter.
The figures come at a time when finance minister Nirmala Sitharaman has accepted an economic slowdown in Parliament and claimed that it still can’t be termed as a recession. In the past few months, the Centre took a number of steps to reverse the slowdown, including a cut in the corporate tax rate.
New Delhi: Reacting sharply to the economic slowdown India is witnessing, economist and former PM Manmohan Singh said that the sharp fall in the growth rate from 5% in the first quarter to 4.5% in the second quarter is unacceptable and deeply worrying.
“There is no one today that can deny the sharp slowdown in India’s economy & its disastrous consequences particularly for our farmers, youth and poor. The GDP figures released today point that the growth rate of our economy in Q2FY20 is as at 4.5%,” Manmohan said delivering the valedictory speech of National Economy Conclave.
— Congress (@INCIndia) November 29, 2019
Blaming the environment of fear, Manmohan said, “It is my belief that mere changes in economic policy will not help revive the economy. We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing robustly again at 8% p.a.”
“There is a palpable climate of fear in our society today. Many industrialists tell me that they live in an atmosphere of fear in our society today. They tell me that they live in the fear of harassment by Govt authorities. Bankers are reluctant to make new loans for fear of retribution. Entrepreneurs are hesitant to put up fresh projects for fear of failure attributed to ulterior motives.
“Shooting messengers of bad news or shutting off economic reports & data is juvenile & does not behove a rising global economic powerhouse. No amount of subterfuge can hide the performance of a $3 trillion market economy,” he said.
“I urge the Prime Minister to set aside his deep-rooted suspicion of our society and nurse us back to a harmonious, confident and mutually trustworthy society that can revive the animal spirits and help our economy soar,” he added.
The Congress has issued a statement terming BJP’s understanding of GDP as ‘Godse Divisive Politics’.
As several political parties are raising questions over the ‘flailing economy’, the ministry has issued a statement claiming that the fundamentals of the economy are still strong. “We take note of the announcement of the rate of GDP growth. The fundamentals of the Indian economy remain strong. GDP growth is expected to pick up from 3rd quarter of FY 2019-20,” said Atanu Chakraborty, Secretary DEA.
We take note of announcement of the rate of GDP growth . The fundamentals of Indian Economy remain strong . GDP growth is expected to pick up from 3rd quarter of FY 2019-20 says Atanu Chakraborty, Secretary DEA@nsitharamanoffc @Anurag_Office @PIB_India
— Ministry of Finance (@FinMinIndia) November 29, 2019
“IMF has projected India’s GDP growth at 6.1 per cent in FY 2019-20 and 7 per cent in FY 2020-21 in it’s October, 2019 report on World Economic Outlook,” he added.
New Delhi: Despite steps like the corporate tax cut, merging banks and announcing the biggest privatisation drive ever, the Gross domestic product grew 4.5 per cent in the second quarter (July to September) in the current financial year. The previous low was recorded at 4.3 per cent in 2012-13 (January-March).
Core sector output shrinks 5.8% in October
The output of eight core infrastructure industries contracted by 5.8 per cent in October, indicating the severity of economic slowdown, according to the government data released on Friday. Coal production fell steeply by 17.6 per cent, crude oil by 5.1 per cent, and natural gas by 5.7 per cent. Production of cement (- 7.7 per cent), steel (- 1.6 per cent), and electricity (- 12.4 per cent) also declined during the month.
India’s fiscal deficit touches Rs 7 trillion
Within the first seven months, India surpassed the annual target of fiscal deficit. The deficit stood at Rs 7.2 trillion which is 102.4 per cent of the budgeted target for the current fiscal year.
Is this a recession?
A recession is defined as a period of negative economic growth over two consecutive quarters. Recently finance minister Nirmala Sitharaman in the Rajya Sabha has said that there won’t be a recession ever. ” Growth may have come down, but not a recession yet, and won’t be a recession ever,” the minister said.
Look forward to the next quarter
The finance ministry has said that the growth rate will be up from the next quarter. The fundamentals of the Indian economy remain strong. GDP growth is expected to pick up from the 3rd quarter. IMF has projected India’s GDP growth at 6.1 per cent in FY 2019-20 and 7 per cent in FY2020-21 in its October report.
India no more the fastest growing economy
Till 2018, India was the fastest-growing economy. But not anymore in 2019. China is now the fastest-growing economy thought its GDP growth too slowed to 6% in the September quarter, the weakest quarterly growth rate since 1992, down from 6.2% in the previous quarter.
New Delhi: A day after the GDP growth figure for the second quarter invited massive backlash for the government, finance minister Nirmala Sitharaman on Saturday said a total of 12 global companies are interested to shift their base from China to India, thanks to the corporate tax cut.
The government in September reduced the corporate tax rate by almost 10 percentage points in a bid to give a boost to sagging economy. The base corporate tax for existing companies has been reduced to 22 per cent from 30 per cent, and for new manufacturing firms incorporated after October 1, 2019, and starting operation before March 31, 2023, it was slashed to 15 per cent from 25 per cent.
“I had said that I will form a task group, which will look into those companies which want to get out of China, and in the meanwhile, I announced the corporate tax cut. There were many companies which were showing interest and wanting to come back.
“So, this task force has already started contacting many of these companies. The last count, I came to know was about 12 of them have already been spoken to, their minds understood, their expectation listed out so that the government can come up with a concrete offer for them to shift from where they are now, so that the ecosystems can get built here, new industries can come,” she said, as quoted by PTI.
Talking about the GDP growth rates, she expressed hope that the next numbers should be better.
India’s growth falling to a more than six-year low of 4.5 per cent in the second quarter of 2019-20 is sub-optimal and below the potential of the economy, the industry pointed out.
(With PTI Inputs)
New Delhi: Days after Nirmala Sitharaman defended the Narendra Modi-led government over the economic policies, firebrand Bharatiya Janata Party (BJP) leader Subramanian Swamy said that the Union Finance Minister ‘doesn’t know any economics’. Swamy, a Harvard-trained economist, who has been positioning himself for the FM’s post also claimed that PM Modi’s advisors were too afraid to tell him the truth. “The Prime minister knows nothing about it. He is being told ‘wonderful growth rate’,” Swamy said in a recent interview with HuffPost India.
Upping the ante against Sitharaman, Swamy, said, “If you see the press conferences, she (Sitharaman) is handing the mic to civil servants to answer. What is the problem in the country today? Poor demand. Supply is not the problem. But what did she do? She relaxes taxes for corporates. Corporates are flushed with supply. They will just use it.”
Talking about PM Modi, Swamy said that he had been over looked by the Prime Minister because the ‘PM didn’t want any minister to talk back to him, let alone in public, but in private cabinet meetings too’.
Notably, Swamy’s comment against PM Modi and Finance Minister Sitharaman comes days before India’s GDP growth rate went down to 4.5 per cent in the second quarter of 2019-20. The interview took place on Wednesday, and on Friday the GDP figures were revealed.
In the interview, Swamy put out the GDP numbers closer to 1.5 per cent. He had stated,”Do you know what the real growth rate today is? They are saying that it is coming down to 4.8%. I’m saying it is 1.5 per cent.”
Earlier this year, similar observation were made by former Chief Economic Advisor Amitabh Kant. In a piece for The Indian Express, Kant had argued,”My results indicate that methodological changes led to GDP growth being overstated by about 2.5 percentage points per year between 2011-12 and 2016-17, a period that spans both UPA and NDA governments. Official estimates place average annual growth for this period at about 7 per cent. Actual growth may have been about 4.5 per cent, with a 95 per cent confidence interval of 3.5 to 5.5 per cent.”
A look at six indicators shows all of them have collapsed from positive growth in April to contraction in September.