GDP to Grow at 7.2% for FY19
08, Jan 2019
Prelims level : Economy-Growth Mains level : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
- The government has projected GDP growth for the full year 2018-19 to come in at 7.2%, which implies that growth in the second half of the year would slow significantly to 6.8% from the 7.6% clocked in the first half of the year, according to the first advance estimates of national income for 2018-19 released by the Ministry of Statistics.
- The Indian economy is estimated to grow at 7.2 per cent in financial year 2018-19, the fastest in three years, primarily on the back of higher industrial growth, with growth estimated to improve for manufacturing and construction sectors, the first advance estimates released by Central Statistics Office (CSO)
- This growth estimate for the entire year is slower than the Reserve Bank of India’s forecast of 7.4%
- Five out of eight sectors are estimated to record a higher growth in 2018-19 compared with previous financial year. GVA growth for manufacturing sector is estimated to rise to 8.3 per cent in 2018-19 from 5.7 per cent in 2017-18, while that for construction sector is estimated at 8.9 per cent, sharply up from 5.7 per cent in previous financial year.
- There is an indication of a slowdown in the second half, but not for such a slowdown. Some of the slowdown seems to be in the services sector, particularly in those sectors with a larger weight such as transport and communications, and financial services. Otherwise, there doesn’t seem to be a reason for the slowdown. A growth rate of 7-7.2% for the second half might have been more realistic
- The advance estimate says that the growth in the agriculture sector would be 3.8% in 2018-19, faster than the 3.4% in the previous year. The manufacturing sector is estimated to grow at 8.3% in 2018-19 compared with 5.7% in 2017-18.