The economy of India appeared to be slowed down in the fiscal year 2019 as per the finance ministry report published on Thursday. However, India still is the fastest growing economy of the world.
Amidst the ongoing General Elections, the reports are expected to create another debate about the health of the economy under PM Modi’s watch, as the BJP has highlighted high economic growth in its governance. It is a widely acknowledged fact that growth momentum in the fourth quarter of 2018-19 had slowed down due to a string of factors.
The report said, “The proximate factors responsible for this slowdown include declining growth of private consumption, tepid increase in fixed investment, and muted exports. On the supply side, the challenge is to reverse the slowdown in growth of agriculture sector and sustain the growth in the industry.”
The report comes against the conditions of data pointing to decelerate in some sectors such as automobiles and overall manufacturing. GDP growth in the October-December quarter of 2018-19 slowed to 6.6%, while the Central Statistics Office (CSO) has estimated growth for 2018-19 at 7%, marginally down from the previous estimate of 7.2%.
In its monetary policy statement, the Reserve Bank of India said that more recent high frequency indicators point to manufacturing growth slowing down while investment demand remaining quiet. The central bank has cut rates twice to support growth in the face of slowing inflation.