Think-tank National Council of Applied Economic Research (NCAER) on Friday pegged the economic growth for the current fiscal at 4.9 per cent, a tad down from 5 per cent estimated by the National Statistical Office (NSO).
For 2020-21, the NCEAR expects the Indian economy to improve its growth rate to 5.6 per cent. The Indian economy grew by 6.1 per cent in 2018-19.
“GDP growth is forecast to be 4.9 per cent in Q3 (third quarter) 2019-20, and 5.1 per cent in (fourth quarter) 2019-20. The annual growth rates for 2019-20 and 2020-21 are forecast to be 4.9 per cent and 5.6 per cent, respectively,” an NCEAR statement said.
The NSO as well as the RBI have projected the GDP growth rate at 5 per cent for the current fiscal. The NCAER has indicated some improvement in the fourth quarter of the current financial year.
Elaborating further it said, “Due to better rainfall in the monsoon as well as the post-monsoon seasons and considerable improvement in the storage of water in major reservoirs of the country, the prospects for growth in the agricultural sector remain bright.”
Both the ministry of agriculture’s second advance estimates and NCAER’s own estimates point to higher agricultural output in the current fiscal versus the previous year.
This should also lead to the lowering of food inflation in the coming months, which has otherwise remained high due to the lower than expected output of a few commodities, particularly vegetables and pulses, it added.
IIP down
The index of industrial production declined 0.4 per cent in the second quarter of 2019-20 and 0.9 per cent in the third quarter of 2019-20 on a year-on-year (y-o-y) basis. The IIP of capital goods and consumer durables goods declined in the both second and third quarters of the current fiscal.
Consumer non-durables also declined in December 2019. On the bright side, core IIP improved in December 2019, with buoyant growth in the key sectors of steel and cement, it said. The Nikkei PMI improved through November and December 2019 and January 2020.
Talking about green shoots in services, it said, “The GVA of the services sector grew at 6.8 per cent in Q1 and 6.9 per cent in Q2 this fiscal.”
