New Delhi: The central government on Tuesday announced that the GDP growth rate for the fiscal year 2020 stood at five per cent as compared to the growth rate of 6.8 per cent in last year, the slowest recorded in 11 years. Also Read - Centre Working on Fresh Economic Package to Address 2nd Wave of Coronavirus: Report
Not only that, but the Gross Value Added (GVA), that excludes the net taxes from GDP, was pegged at 4.9 per cent as compared to 6.6 per cent in FY19, enough to push the Centre to opt for a fiscal stimulus in order to reach the ambitious $5 trillion economy by 2025. Also Read - No Interest Cut on Small Savings Schemes: Finance Ministry Withdraws Orders 'Issued by Oversight'
“The Real GDP or GDP at Constant Prices (2011-12) in the year 2019-20 is likely to attain a level of Rs 147.79 lakh crore, as against the Provisional Estimate of GDP for the year 2018-19 of Rs 140.78 lakh crore, released on 31st May 2019. The growth in real GDP during 2019-20 is estimated at 5 per cent as compared to the growth rate of 6.8 per cent in 2018-19,” the Statistics & Programme Implementation Ministry said. Also Read - Govt Slashes Rates on Small Savings Schemes by up to 1.1 Per Cent, PPF Hits 46-Year Low of 6.4 Per Cent
Union Finance Minister Nirmala Sitharaman is expected to present the annual budget next month. Notably, in order to achieve the $5 trillion target, India’s economy needs to grow at around 8 per cent every year. Moreover, the gross fixed capital formation has been estimated at 1 per cent this year against last year’s 10 per cent.
Last week, Sitharaman had unveiled a plan to invest Rs 102 lakh crore for infrastructure under the National Infrastructure Pipeline (NIP), raising the initial target of Rs 100 lakh crore.
The annual economic growth in the second quarter, i.e., July to September, slowed to 4.5 per cent recording the weakest pace since 2013. The Finance Ministry blamed the slowdown on the debilitate consumer demand and private investment seeking the Prime Minister Narendra Modi to speed up fiscal reforms.
Meanwhile, the growth in the Agriculture sector stood at 2.8 per cent as compared to the previous year’s 2.9 per cent. Similarly, ‘Mining and Quarrying’, ‘Manufacturing’ and ‘Construction’ are estimated to be 1.5 per cent, 2 per cent and 3.2 per cent, respectively.
The GVA at Basic Prices for 2019-20 from ‘Electricity, Gas, Water Supply and Other Utility Services’ sector is expected to grow by 5.4 per cent as compared to growth of 7 per cent in the fiscal year 2018-19.
It must be noted that the growth data for the October-December quarter, along with the revised estimates on full-year growth will be released on February 28.