New Delhi: The Indian economy grew at 4.2 per cent in 2019-20, lower than the 6.1 per cent figure registered in 2018-19, as the Covid-19 pandemic adversely impacted economic activity in the last month of the fiscal year, especially manufacturing and construction.
The full-year GDP growth is the lowest India has registered in 11 years.
The Central Statistics Office had earlier forecast that the economy would grow at 5 per cent in 2019-20.
In the January-March quarter, GDP grew at 3.1 per cent as against 5.7 per cent in the corresponding year-ago period.
These are the first set of GDP numbers showing the impact of the Covid-19 pandemic and the nationwide lockdown, which came into effect from 25 March.
Economists expect a massive contraction in the first quarter of 2020-21 due to the two-month lockdown, which is likely to pull down the full-year growth to a 5-7 per cent contraction.
The Reserve Bank of India’s monetary policy committee refrained from providing any growth projections for the first time in its history, citing the huge uncertainties around the pandemic and its impact on various sectors.
India has announced a Rs 21 lakh crore economic package comprising mainly credit support measures to different sectors.
For the full year, data from the Central Statistics Office showed that while agriculture grew at 4 per cent, manufacturing growth was stagnant at 0.03 per cent.
Growth in private final consumption expenditure decelerated to 5.3 per cent from 7.2 per cent a year ago, while government final consumption expenditure grew at 11.8 per cent as against 10.1 per cent the previous year.
Gross fixed capital formation — a key measure of investment demand in the economy — contracted by 2.8 per cent in 2019-20. Exports and imports also contracted by 3.6 per cent and 6.8 per cent respectively.
Nominal GDP growth for the full year also slowed to 7.2 per cent to Rs 203 lakh crore in the fiscal, as against 11 per cent growth the previous year.
For the January to March quarter, agriculture grew at 5.9 per cent. Manufacturing and construction, considered to be labour-intensive, were both impacted by the pandemic and lockdown, contracting by 1.4 per cent and 2.2 per cent respectively.
The growth in ‘Trade, Hotels, Transport, Communication and Services related to Broadcasting’ also decelerated to 2.6 per cent in the fourth quarter from 6.9 per cent the previous year, with tourism being one of the worst-hit sectors due to the pandemic.
Financial, Real Estate & Professional Services also grew at only 2.4 per cent as against 8.7 per cent earlier.
Growth in private final consumption expenditure decelerated to 2.7 per cent while government final consumption expenditure grew at 13.6 per cent.
Gross fixed capital formation contracted sharply by 6.5 per cent.