Economic think tank NCAER has lowered its GDP growth estimate to 4.9% for the second quarter of the current financial year. This decline in growth rate has been estimated in view of the current sluggishness in almost all sectors. The GDP growth rate during the first quarter of the current financial year was five per cent, which is the lowest level in the past six years.
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The Delhi-based National Council of Applied Economic Research (NCAER) has projected GDP growth rate to be 4.9% for the entire financial year (2019-20) as well. It was 6.8% last year. According to NCAER, it may not be possible to bring the growth rate back on track through monetary policy alone.
Spending should be increased while keeping the revenue deficit under control. Mandal said that there are many ways for this. We have strong central decision-making leadership. There is a lot of scope for spending on many items in the current financial year. Therefore, it would also be wrong to say that there is no scope for spending. According to Mandal, the expenditure in the current financial year has been very low, even the government has not paid all its payments. Apart from this, we need many types of reforms. The government should avoid exempting indirect taxes and customs duties.
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Estimates of other agencies: The Asian Development Bank (ADB) had projected India's growth rate for the current financial year to be reduced by 50 basis points to 6.5 percent. The Organization of Economic Co-operation and Development (OECD) also reduced India's economic growth forecast by 1.3 percent to 5.9 percent in the current financial year. The main global rating agencies, Standard & Poor's (S&P) and Fitch, have also cut forecasts for India's growth.
