India’s GDP growth plunges to 4.5% in 2nd quarter

India’s Gross Domestic Product (GDP) growth has slipped to a 26-quarter low of 4.5 per cent in the second quarter (July-September) of the current fiscal, data released by National Statistical Office (NSO).

The GDP growth rate has now slowed for the sixth consecutive quarter with the previous low recorded at 4.3 per cent in March 2013.

The July-September growth rate of gross value added (GVA), which is GDP minus net product taxes, has slowed to 4.3 per cent as against 6.9 per cent a year ago.

With this, the GDP growth rate for April-September, the first half of this fiscal, stands at 4.8 per cent as against 7.5 per cent a year ago.

The economic growth has been sliding sharply in recent quarters, prompting the government to announce a series of measures including a mega corporate tax reduction to boost economic expansion.

As per the NSO data, the GVA growth in the manufacturing sector contracted by 1 per cent in the second quarter of this fiscal from 6.9 per cent expansion a year ago. Whereas, the farm sector GVA growth remained subdued at 2.1 per cent, down from 4.9 per cent in the corresponding period of the previous fiscal.

While construction sector GVA growth slowed to 3.3 per cent from 8.5 per cent earlier, the mining sector growth was recorded at 0.1 per cent as against 2.2 per cent contraction a year ago.

Electricity, gas, water supply and other utility services growth also slowed to 3.6 per cent from 8.7 per cent a year ago.

Similarly, trade, hotel, transport, communication and services related to broadcasting growth was also down to 4.8 per cent in the second quarter from 6.9 per cent a year ago.

Financial, real estate and professional services growth slowed to 5.8 per cent in the Q2 FY2019-20 from 7 per cent a year ago.

On the other hand, public administration, defence and other services reported improvement with an 11.6 per cent rise during the quarter under review from 8.6 per cent a year earlier.