NEW DELHI — Indian economic growth slumped to a six-year low of 5% in the April-June quarter down from 5.8 per cent in the previous quarter, said NSO. The GDP growth for the first quarter of FY20 has been slowest in six years.
Chief Economic Adviser K.V. Subramanian also attributed the slowdown to global trade tensions. The Ministry of Statistics and Program Implementation released the data. The sale of new cars has also dipped 20%, raising fears of a deep slowdown.
Subramanian said the government is taking various steps to boost economic expansion.
India’s central bank said reviving consumption and private investment would require greater spending on infrastructure and structural changes, including labor law, taxation and legal reforms.
India’s GDP growth averaged 7.7% from 2014 to 2018. The economy began losing momentum after expanding 8% in the April-June quarter last year. The previous low GDP growth was 4.3% in the January-March quarter in 2013.
Various economists and surveys had predicted a decline in the GDP for the June quarter. But the GDP growth rate of 5 per cent remained well below even these estimates. India Ratings and Research Pvt Ltd had expected the Q1 GDP numbers to plunge to 5.7 per cent. Reuters’ poll had said the Indian economy would grow at a year-on-year pace of 5.7 per cent in the June quarter.
Finance Minister Nirmala Sitharaman announced the merger of 10 state-run banks into four and promised a recapitalization of funds to improve lending to businesses. The government on Wednesday announced a liberalization of foreign direct investment in domestic manufacturing, coal mining and digital media to infuse capital into the economy.
