In this article, we draw a comparison between key economic growth indicators in FY20 as against FY19.
All is not well for the Indian economy as even before the pandemic the GDP growth has continuously been on a downward trajectory with the latest quarter number coming in at 3.1% (40 quarter low). Not only this but the government revised the previous quarter numbers for FY20 as well to Q1 – 5.2%, Q2 – 4.4% and Q3 – 4.1%.
The GDP grew at its slowest pace in 11 years at 4.2% in FY20 below the RBI forecast of 5% and FY19 growth rate of 6.1%. The GVA which is GDP minus taxes grew by 3.9% FY20 as against 6%. In terms of sectors, agriculture and manufacturing segment which constitutes the majority of our workforce grew at a meagre 4% and 0.03% in FY20.
The fiscal deficit figures also worsened to 4.6% of GDP in FY20 higher than the target of 3.8% and original estimate of 3.3%.
Below is the infographic depicting key economic indicators released recently and key segments of GDP
Below are some more growth indicators for FY20
|Production of Coal||7.4||-0.5|
|Production of Crude Oil||-4.2||-5.9|
|Production of Cement||13.3||-0.8|
|Consumption of Steel||7.5||1.3|
|Sales of Commercial Vehicles||17.6||-28.8|
|Cargo Handled at Major Sea Ports||2.9||0.9|
|Cargo Handled at Airports||2.5||-9.0|
|Passengers Handled at Airports||11.8||-1.0|
|Net Tonne Kilometer||6.6||-4.5|
|Aggregate Bank Deposits||10.0||7.9|
|Aggregate Bank Credits||13.3||6.1|
|LIC Premium - Non-Linked||6.1||11.4|
|LIC Premium - Linked||-8.4||-10.5|
|CPI General Index||3.4||4.8|
Source: MOSPI, GOI
This is not it, as the COVID – 19 pandemic led lockdown is likely to bring down growth even further in FY21 impacting National Income, Exports as well as Imports. And if the RBI’s governor words are to be taken, then the growth is expected to be negative for FY21. However, the government and RBI have taken several steps recently to reduce the economic impact of COVID – 19 through liquidity support to businesses, levy to banks over asset quality, and easing restrictions on the lockdown. The RBI has also cut interest rates by 115bps since March and lending rates are headed lower which is always a good sign for the economy.
Read more on what are experts on how will economic recovery shape up. Here is the link.