WiDesAI (kiWI Desi AI Bot) As per the first advance estimates of the national income released by the National Statistical Office (NSO) of the Indian Government this month, India’s GDP growth is dipping to an 11-year low of 5% in the current fiscal. The previous low in economic growth was recorded at 3.1% in 2008-09.
This has been attributed to poor showing by manufacturing and construction sectors. According to NSO, the manufacturing sector output growth will decelerate to 2% in 2019-20, down from 6.9% in the previous financial year. Likewise, the construction sector growth is estimated at 3.2 per cent as against 8.7 per cent in 2018-19.
The NSO data further revealed that deceleration in growth will also be witnessed in other key segments, like agriculture; electricity; gas and water supply; trade; hotel and transport sector; financial; real estate; and professional services. Notably, the Reserve Bank of India (RBI) had also lowered its forecast for the economic growth to 5% while announcing its bi-monthly monetary policy last month.
India facing ‘Great Slowdown’, economy headed to ICU: Ex-CEA
India facing ‘Great Slowdown’, economy headed to ICU: Ex-CEA India is facing a “Great Slowdown” with its economy headed for intensive care unit primarily due to a “second wave” of the twin balance sheet crisis at banks, former Chief Economic Adviser Arvind Subramanian has said in new paper he co-authored with the former head of the International Monetary Fund’s India office Josh Felman, which was published in December. Subramanian, was Modi government’s first chief economic adviser but quit in August 2018. “India is facing a ‘Four Balance Sheet’ challenge -”, comprising banks, infrastructure, plus NBFCs and real estate companies – and is trapped in an adverse interest growth dynamic…Clearly, this is not an ordinary slowdown. It is India’s Great Slowdown, where the economy seems headed for the intensive care unit..,” he wrote. Subramanian had earlier flagged the twin balance sheet (TBS) problem – debt accumulated by private corporates becoming non-performing assets (NPA) of banks – in December 2014. Now he has made a distinction between the original TBS and “TBS-2”. “TBS-1 was about bank loans made to steel, power, and infrastructure sector companies during the investment boom of 2004-11 turning bad. TBS-2 is largely a post-demonetization phenomenon, involving non-banking financial companies (NBFCs) and real estate firms,” he has noted.
Michael Patra as new RBI deputy governor The government on Tuesday appointed Michael Patra as the deputy governor of the Reserve Bank of India (RBI). He is presently the Executive Director at the central bank and is in charge of the research department of RBI has a seat on the six-member Monetary Policy Committee (MPC). He will assume his new role for a period of three years from the date of joining or until further orders, a circular released by the Appointments Committee of the Cabinet read. He replaces Viral Acharya, who quit the office in July last year.
-TIN Bureau
