India's GDP growth has been forecasted to dip to an 11-year low of 5% in the current fiscal, mainly due to poor showing by manufacturing and construction sectors, government data showed on Tuesday.
As per the first advance estimates of the national income released by the National Statistical Office (NSO), the manufacturing sector output growth will decelerate to 2% in 2019-20, down from 6.9% in the previous financial year.
Likewise, the construction sector growth is estimated at 3.2% as against 8.7% in 2018-19.
According to back series GDP data released by the government in November 2018, the previous low in economic growth was recorded at 3.1% in 2008-09.
The dismal performance for the fiscal was anticipated as the Gross Domestic Product (GDP) growth in the first quarter was 5% and 4.5% in the subsequent three-months period.
The Reserve Bank of India (RBI) had also lowered its forecast for the economic growth to 5% while announcing its bi-monthly monetary policy last month.
The macro-economic data is important as Finance Minister Nirmala Sitharaman would be using it for preparing Budget estimates for the next financial year. She is expected to present the Budget 2020-21 in Parliament on February 1.
The NSO data further revealed that deceleration in growth will also be witnessed in other key segments, like agriculture; electricity; gas and water supply; trade; hotel and transport sector; financial; real estate; and professional services.
Whereas, some sectors, including mining, public administration, and defence, showed minor improvement.
As per the advance estimates for 2019-20, the growth in real GDP during 2019-20 is estimated at 5% as compared to 6.8% in 2018-19.
The estimated growth of real GVA (Gross Value Added) in 2019-20 is 4.9% as against 6.6% in 2018-19.
The GVA at basic prices for 2019-20 from agriculture, forestry and fishing sector is estimated to grow by 2.8% as compared to 2.9% in 2018-19, the CSO statement said.
As regards, mining and quarrying sector, the GVA at basic prices for 2019-20 is estimated to grow at 1.5% as compared to 1.3% in 2018-19.
The per capita income at current prices is estimated at Rs 1,35,050, showing a rise of 6.8%, as compared to Rs 1,26,406 during 2018-19 with the growth rate of 10.0%.
Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 57.42 lakh crore in 2019-20 as against Rs 55.70 lakh crore in 2018-19.
At constant (2011-12) prices, the GFCF is estimated at Rs 45.93 lakh crore in 2019-20 as against Rs 45.48 lakh crore in 2018-19.
"In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2019-20 are estimated at 28.1% and 31.1%, respectively, as against the corresponding rates of 29.3% and 32.3%, respectively in 2018-19," the CSO said.
Commenting on the data, ICRA principal economist Aditi Nayar said the momentum of spending by the central government dipped in October-November 2019, and there are apprehensions that revenue concerns may necessitate an expenditure squeeze, which has emerged as a key risk to the pace of economic growth.
"For FY2020 as a whole, we expect GVA and GDP growth to print at 5.1% and 5.3%, respectively, modestly higher than the advance estimates of 4.9% and 5.0%," she said.