New Delhi, January 8: Calling the GDP performance for the current fiscal “quite disappointing”, former Finance Secretary Subhash Chandra Garg said that it had given a big jolt to the ambition of making India a $5 trillion economy by 2024-25, which was becoming harder to now.
His remarks came after the data on advance estimate on the growth of economy issued by the Ministry of Statistics and Programme Implementation showed that India’s GDP growth during the fiscal 2019-20 is expected at 5 per cent as compared to 6.8 per cent in year-ago period. The data also showed that in nominal terms, India was expected to grow at 7.5 per cent.
“The year 2019-20, which was expected to be a high growth year of about 11 per cent nominal growth, has delivered a much lower performance. It gives a big jolt to the ambition of making India a $5 trillion economy by 2024-25. It is becoming harder to do so,” Garg said.
The Chief Statistics Office (CSO) also projected a GVA growth of only two per cent for manufacturing for the year. Garg said the current year was turning out to be a “year wasted” for manufacturing considering that last year, CSO had projected growth of 8.3 per cent for manufacturing while releasing their first advance estimates, which came down to 6.9% per cent in the provisional estimates.
The former bureaucrat added that it was no surprise that the gross fixed capital formation (GFCF), which represents the investment in the economy, had “not grown at all”.
“GFCF in 2019-20 at Rs. 45.93 lakh crore in constant prices grew by a pathetic Rs 0.45 lakh crore over the GFCF of Rs 45.48 lakh crore in 2018-19 at growth rate of princely .01 per cent only. This must be one of the lowest growth rates of investment in many years. Such disappointing manufacturing and fixed capital formation growth performance needs to be taken very seriously.”
Garg advocated that a more comprehensive sectoral analysis for each of the manufacturing and infrastructure sectors was needed for getting the right policy, credit and investment decisions made for growth to come back next year. He added that India needs to pay much more attention to the services sector as our growth salvation lies in services much more than manufacturing.
The former Finance Secretary added that the advanced estimates have been released when three months of the current financial year are still remaining and may undergo some changes.
“On net basis, it seems there might be somewhat downward revision in the provisional GDP and GVA numbers when released,” he concluded.