India’s Gross Domestic Product (GDP) is estimated to grow at 5 per cent during 2019-20 as compared to the growth rate of 6.8 per cent in 2018-19, according to the first advance estimates of National Income, released here on Tuesday evening by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
“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 Rs140.78 lakh crore, released on 31 May, 2019,” an official communique said. The data is typically released one month ahead of the presentation of the Union budget.
Economic turbulence has taken a toll on the growth numbers in the first and the second quarter of the current fiscal. GDP, an indicator of the economic growth, was at 4.5 per cent in the second quarter, down from 5 per cent in the first quarter of the current fiscal. The first advance estimates took into account the figures available for the first nine months of the current fiscal.
The Reserve Bank of India has also gradually pegged down its growth forecasts in its successive policy reviews. In its December review, the RBI had pegged India’s economic growth at 5 per cent.
The advance estimates are compiled using the Benchmark-Indicator method where sector-wise estimates are obtained by extrapolation of indicators like the Index of Industrial Production (IIP) in the first seven months of the fiscal, financial performance of the listed private companies up to the quarter ending September, the first advance estimates of crop production, accounts of Central and state governments, indicators of deposits of credits, passenger and freight earnings of the railways, civil aviation and ports, and sales of commercial vehicles, among others, available for the first eight months of the fiscal.
With the introduction of the Goods and Services Tax (GST) from July 1, 2017, and consequent changes in the tax structure, the total tax revenue used for GDP compilation includes non-GST revenue and GST revenue.
For the year 2019-20, the Budget estimates of tax revenue as provided by the Controller General of Accounts (CGA) will be used for estimating taxes on products at current prices.
Real Gross Value Added (GVA) is expected to grow in 2019-20 at 4.9 per cent as against 6.6 per cent in 2018-19. The manufacturing sector is expected to grow at 2% in 2019-20 as compared to 6.9 per cent in the previous year.
The per capita income in real terms (at 2011-12 prices) during 2019-20 is likely to attain a level of Rs 96,563 as compared to Rs 92,565 for the year 2018-19, an estimated growth rate of 4.3 per cent during 2019-20, as against 5.6 per cent in the previous year.
Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 57.42 lakh crore in 2019-20 as against Rs 55.70 lakh crore in 2018-19.
Agriculture sector is expected to see a growth of 2.8 per cent in the current fiscal as compared to 2.9 per cent in the previous year.
India’s core sector contracted for the fourth consecutive month in November but its pace slowed to 1.5 per cent from 5.8 per cent in October, led by growth in output of fertilizer, cement and refinery products, raising expectations of growth in industrial production. The eight infrastructure industries grew 0 per cent in April-November as compared to 5.1 per cent in the April-November period of 2018. Industrial production contracted for the third month running in October when it shrunk to 3.8 per cent.