Its official: 5% GDP growth in 2019-20

The growth in real GDP during 2019-20 is estimated at 5.0 per cent as compared to the growth rate of 6.8 per cent in 2018-19.

New Delhi: The Indian economy is estimated to grow at 5 per cent in 2019-20 as against 6.8 per cent in the previous fiscal, according to government data.

This is the slowest GDP growth rate in 11 years. Calculated on 2011-12 basis, the previous low was recorded in 2008-09 and was pegged at 3.1%.

The decline has been mainly on account of deceleration in manufacturing sector growth, which is expected to come down to 2 per cent in 2019-20 from 6.2 per cent in the year-ago fiscal, as per the first advanced estimates of the national income released by National Statistical Office(NSO) on Tuesday.

GDP growth rates

The deceleration was also witnessed in sectors like agriculture, construction and electricity, gas and water supply.

Whereas, some sector, including mining, public administration, and defence, showed minor improvement.

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.

Manufacturing worst hit

In 2019-20, manufacturing sector is expected to grow by 2.0 per cent against a much higher growth rate of 6.9 per cent in 2018-19.

The estimates were compiled on the basis of growth in private corporate and quasi-corporate / unorganised sectors that constitute 75 per cent and 20 per cent of the country’s overall manufacturing sector respectively.

Construction Sector

In 2019-20 the construction sector is expected to grow by 3.2 per cent as compared to growth of 8.7 per cent in 2018-19.

Key indicators of Construction sector, namely, production of cement and consumption of finished steel registered growth rates of (-) 0.02 per cent and 3.5 per cent respectively during April-November, 2019-20.

Per Capita Income

The Per Capita Income, which is the average income earned per person, during 2019-20 is likely to attain a level of Rs 96,563 as compared to Rs 92,565 for the year 2018-19.

The growth rate in Per Capita Income is estimated at 4.3 per cent during 2019-20, as against 5.6 per cent in the previous year.