Even in the second quarter of the current financial year, the rate of economic growth is declining. The growth rate of GDP has come down to 4.5 percent in the period July to September 2019. This is the lowest level in the past six years. Earlier, the GDP growth rate of 4.3 per cent was recorded in the January-March 2012-13 quarter. The National Statistics Office (NSO) released the GDP data for the second quarter of FY 2019-20 on Friday. In the same quarter of the last financial year, the growth rate of GDP was 7 percent. Whereas the country's economic growth rate was 5 percent in the first quarter of the current financial year.
According to the NSO, the size of GDP in the second quarter has been Rs 35.99 lakh crore as compared to Rs 34.43 lakh crore in the same period of the last financial year. Commenting on GDP figures, K Subramanian, Chief Economic Advisor in the Finance Ministry, said 'the fundamentals of the economy are strong and by the third quarter the economy will start to come out of recession'. According to the data, the economic growth rate has been the most affected by the performance of agriculture and manufacturing sector. Manufacturing sector's production has registered a decrease of one percent this quarter. It was -1.0 per cent in the July-September period. It was 6.9 per cent in the same quarter of the previous financial year. The agriculture sector, which grew at 4.9 per cent in the second quarter of the last financial year, has been less than half in this period.
According to NSO data, the growth rate of agriculture sector in the July-September quarter of FY 2019-20 has been 2.1 percent. The same situation has also been with the construction sector. The growth rate of this sector in the second quarter has come down to 3.3 percent from 8.5 percent last year. Whereas the growth rate of the mining sector has come down from 2.2 percent in the second quarter of last year to 0.1 percent. All these sectors are counted in the employment generating sectors. On the other hand, there is a decline in performance in the services sector. The growth rate of electricity, gas, water and other social services has been 3.6 percent in the second quarter of the current financial year. Whereas in the same period last year, the sector achieved growth at the rate of 8.7 percent. Similarly, growth in trade, hotels, transport, communication and other services related to broadcasting has come down from 6.9 per cent to 4.8 per cent in the second quarter. The growth rate of financial services has also fallen during this period and it has been 5.8 percent in the second quarter of the current financial year as compared to seven percent. But the growth rate of public service, defense and other services has increased from 8.6 percent to 11.6 percent in the second quarter of last year.
The Gross Fixed Capital Formation, considered a barometer of investment in the economy, has been estimated at Rs 10.83 lakh crore in Q2 of 2011-12. It was Rs 11.16 lakh crore in the same period last year. This is 30.1 percent of GDP which was 32.4 percent last year. However, the government's expenditure figures have shown an increase in the second quarter. It has increased from 11.9 per cent in the second quarter of last year to 13.1 per cent this year. As far as the performance of the country's economy is concerned on a half-yearly basis, the GDP rate in the period April to September is 4.8 per cent. It was 7.5 percent last year. It is being told that domestic and international agencies had reduced their estimates regarding the slow pace of the economy. The Reserve Bank has also lowered its earlier estimate of GDP to 6.9 percent for the financial year 2019-20 to 6.1 percent.
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