The latest report shows that GDP growth rate has fallen down to 5.7% while the manufacturing growth is down to 1.2%. This is the second time when India’s GDP growth rate is behind China.
Downside of Demonetization and GST Rollout
The Finance Ministry has said that the GDP growth rate fall is the result of destocking that happened previous to GST rollout. Experts have opined that this is the result of two consecutive setbacks to the industry. One from Demonetization and the other from GST rollout.
The GDP growth rate for this quarter is lowest in the last three years. Another shock came from the manufacturing sector where the growth rate has fallen from 5.3% to 1.2%. This will certainly have a negative impact on jobs as well.
Chief Statistician of India Dr. T.C.A. Anant addresses a press conf. on Quarterly Estimates of GDP for the First Quarter of 2017-18, in ND pic.twitter.com/VRkqxrQgVh
— PIB India (@PIB_India) August 31, 2017
Sign of Hope for the Economy in the Next Quarter
The growth rate in the core sector is a positive sign. The growth rate in this sector has risen to 2.4% in July while in June it was 0.8%. Core Sector includes Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity. Also, GST collections exceeding government target shows another positive sign for the economy.
The fiscal deficit for April-July has touched to 92% of full year target. Time has come for the government to stress on concrete measures to control the situation and improve the economy.