GDP estimated to grow at 5% in 2019-20: Government data

India's Gross Domestic Product (GDP) is estimated to register a growth of 5 per cent in 2019-20 as against 6.8 per cent in the previous fiscal, according to government data released on Tuesday (January 7).

The growth rate of 5% is the slowest in 11 years and it is expected that Finance Minister Nirmala Sitharaman would opt for extra fiscal stimulus while presenting the annual budget in February.

The first advanced estimates of the national income released by National Statistical Office (NSO) showed that the decline has been largely due to deceleration in manufacturing sector growth, which is expected to plunge to 2 per cent in 2019-20 from 6.9 per cent in 2018-19. The slowdown was also seen in sectors like agriculture, construction and electricity, gas and water supply. Some sectors, including mining, public administration, and defence, showed minor improvement.

According to the government, the private corporate sector growth in the manufacturing sector for 2019-20 is estimated using latest available information on major listed companies during first half of financial year 2019-20. The private corporate sector growth has a share of over 75 per cent in the manufacturing sector.

Construction is expected to grow 3.2 per cent in 2019-20, compared to 8.7 per cent the previous year, while the farm sector is expected to grow 2.8 per cent, compared to 2.9 per cent a year earlier, according to government data. Electricity, gas, water supply and other utility services sector is expected to grow by 5.4 per cent in 2019-20 as compared to growth of 7.0 per cent in 2018-19. 

It is to be noted that the GDP fell to 4.5 per cent in the second quarter of current fiscal as against 5 per cent in the first quarter. For 2018-19, the GDP was forecasted to grow at 7.2 per cent but it was brought down to 7 per cent in the second advance estimates and was further lowered down to 6.8 per cent.