New Delhi: India’s GDP is expected to accelerate at 7.2 per cent in 2018-19 led by manufacturing and agriculture sectors, the economy, which grew by 6.7 per cent in previous fiscal, is expected to accelerate at 7.2 per cent, according to “first advance estimates” released by the Central Statistics Office on Monday.
However, an analysis of the data shows that it may not be of much comfort to the government as it enters in Lok Sabha elections in April-May 2019.
The economy had hit a high of 8.2 per cent in the first quarter (April-June) of 2018-19 raising hope that the economy is back in targeted high trajectory growth of 8 per cent.
But in the second quarter, GDP moderated to 7.1 per cent due to slowdown in consumption demand and the services sector.
So taking first and second quarter, in the first half of 2018-19 GDP grew by 7.6 per cent. CSO estimate on Monday that GDP will grow by 7.2 per cent for whole of 2018-19 means that growth will further moderate in the remaining two quarter of the current fiscal.
It means that CSO is projecting a growth of 6.8 per cent in the second half of 2018-19 against 7.6 per cent in the first six months of the financial year.
A slowing economy in second half of the fiscal is something which the government will not like as it goes to crucial general election around May. This means that growth momentum will be slowing down when the government will be up for re-election.
India needs a GDP growth of 8 per cent-plus to generate enough jobs for its young population.
The government is already under criticism for failing to create enough jobs for the more than 12 million young Indians entering the labour force each year.
Many economists had already lowered India’s growth forecast to around 7 per cent for the 2018-19 fiscal year against RBI’s earlier forecast of 7.4 per cent, due to weak consumption and a slowdown in credit offtake.
The gross domestic product had expanded by 7.1 per cent in 2016-17 and 8.2 per cent in 2015-16.
The CSO will release economic growth data for the October-December quarter on February 28, along with revised full-year growth estimates....