GDP Growth at 11-Year Low of 4.2% in FY20, Dips to 3.1% in Jan-Mar

New Delhi:  India's economic growth slowed to 3.1% in January-March and to an 11-year low of 4.2% for the full fiscal 2019-20 amid a drop in consumption and investment. 

The gross domestic product (GDP) growth stood at 5.7% in the corresponding quarter of 2018-19, according to data released by National Statistical Office (NSO) on Friday.

During 2019-20, the Indian economy grew at 4.2% against 6.1% in 2018-19. The economic growth was the lowest since 2008-09 when the economy had expanded at 3.1%.

The government had imposed a lockdown to curb the spread of COVID-19 infections from March 25, 2020. 

Meanwhile, data released by the commerce ministry showed that eight core industries contracted by 38.1 per cent in April 2020 due to the coronavirus-induced lockdown.

The Indian economy also got impacted during the January-March quarter due slowing down of economic activities across the world.

The Reserve Bank had earlier pegged the GDP growth for 2019-20 at 5%, as projected by the NSO in its first and second advance estimates released in January and February this year.

China's economy contracted 6.8% in January-March 2020, showing the impact of COVID-19.

Meanwhile, the CSO revised downwards growth in the previous October-December quarter of 2019-20 to 4.1% from 4.7%.

Similarly, the first and second quarter growth figures were revised downward to 5.2% and 4.4% from 5.6% and 5.1%, respectively.

According to the data, gross value added (GVA) growth in the manufacturing sector contracted by 1.4% in the fourth quarter of 2019-20, from 2.1% expansion a year ago.

However, farm sector GVA growth was up at 5.9%, compared with 1.6% in the corresponding period of 2018-19.

Construction sector GVA contracted 2.2% from 6% expansion earlier. Mining sector growth came in at 5.2%, against a contraction of 4.8% a year ago.

Electricity, gas, water supply and other utility services segment grew by 4.5% in the fourth quarter, against 5.5% growth a year ago.

Similarly, trade, hotel, transport, communication and services related to broadcasting growth declined to 2.6% in the fourth quarter from 6.9% earlier.

Financial, real estate and professional services growth fell to 2.4% in Q4 FY20 from 8.7%.

Public administration, defence and other services too saw growth slip to 10.1% during the quarter under review, from 11.6% a year earlier.

"GDP at Constant (2011-12) Prices in Q4 of 2019-20 is estimated at Rs 38.04 lakh crore, against Rs 36.90 lakh crore in Q4 of 2018-19, showing a growth of 3.1 per cent," the NSO said in a statement.

"Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2019-20 is now estimated to attain a level of Rs 145.66 lakh crore, as against the First Revised Estimate of GDP for the year 2018-19 of Rs 139.81 lakh crore, released on 31st January 2020.  The growth in GDP during 2019-20 is estimated at 4.2 pe rcent as compared to 6.1 perc ent in 2018-19," it said.

"The Per Capita Income at current prices during 2019-20 is estimated to be Rs 134,226, showing a rise of 6.1 percent as compared to Rs 1,26,521 during 2018-19," the statement said.

Fiscal Deficit Widens to 4.6% of GDP in 2019-20

The country's fiscal deficit widened to 4.6% of GDP in 2019-20 mainly on account of poor revenue realisation, according to official data.

The deficit, which signifies the gap between government revenue and expenditure, is higher than the revised estimate of 3.8% for the fiscal.

According to the Controller General of Accounts (CGA) data, the fiscal deficit for 2019-20 worked out to be 4.59% of the GDP, while the revenue deficit was 3.27%.

The effective revenue deficit was 2.36%, the data showed.

Finance Minister Nirmala Sitharaman while unveiling the budget in February pegged the fiscal deficit for 2019-20 at 3.8%, up from 3.3% in the original budget estimate.

The increase in the fiscal deficit has been mainly on account of shortfall in revenue collection during 2019-20. The revenue receipts during the year worked out to be only 90% of the revised estimate.

In absolute terms, total receipts of the government were Rs 17.5 lakh crore against the estimate of Rs 19.31 lakh crore.

The data showed the government's total expenditure was Rs 26.86 lakh crore, lower than Rs 26.98 lakh crore projected earlier.

The revenue deficit during the fiscal soared to 3.27% of the GDP against 2.4% in the revised estimates