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Freefall: Slowdown, pandemic pulls India’s FY20 GDP growth rate to 11 yr low

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New Delhi, May 29 : The general economic slowdown, along with the impact of the global Covid-19 pandemic, pulled India’s GDP growth rate down to 3.1 per cent in the last quarter of 2019-20.

The Q4 growth rate was slower than 4.1 per cent in Q3 and 5.7 per cent reported for the like period of the previous fiscal.

Consequently, India’s FY20 GDP declined to 4.2 per cent from 6.1 per cent in FY19. This is the slowest rate of India’s GDP growth in the last 11 years.

However, the rate, if looked at from the prism of constant prices at 2011-12 prices, would still be the lowest in the last 8 years.

“Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2019-20 is now estimated to attain a level of Rs 145.66 lakh crore, as against the First Revised Estimate of GDP for the year 2018-19 of Rs 139.81 lakh crore, released on 31st January 2020,” the National Statistical Office (NSO) said.

“The growth in GDP during 2019-20 is estimated at 4.2 per cent as compared to 6.1 per cent in 2018-19.”

“GDP at Constant (2011-12) Prices in Q4 of 2019-20 is estimated at Rs 38.04 lakh crore, as against Rs 36.90 lakh crore in Q4 of 2018-19, showing a growth of 3.1 per cent.”

On a sequential basis, the quarterly growth rate has progressively come down from 5.2 per cent in Q1 of 2019-20 to 4.4 per cent in Q2 and 4.1 per cent in Q3.

Last fiscal, the Indian economy faced a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints.

Additionally, the national lockdown implemented to curb the Covid-19 outbreak has dealt a severe blow to the economy.

However, the NSO said that these estimates on quarterly as well as annual basis are likely to undergo revisions.

“In view of the global Covid-19 pandemic and consequent nationwide lockdow nmeasures implemented since March 2020, the data flow from the economic entities has been impacted,” the NSO said.

“As some of these units are yet to resume operations and owing to the fact that the statutory time-lines for submitting the requisite financial returns have been extended by the government, these estimates are based on the available data.”

Besides, the NSO data showed that Gross Value Added (GVA) growth rate during the fourth quarter of 2019-20 on a YoY basis fell to 3 per cent, from 5.6 per cent during the like period of the previous fiscal.

Similarly, the GVA growth rate during 2019-20 on a YoY basis declined to 3.9 per cent, from 6 per cent during the like period of 2018-19.

The GVA includes taxes but excludes subsidies.

As per the estimates, the growth in the ‘agriculture, forestry and fishing’ is estimated to be 5.9 per cent from YoY growth of 1.6 per cent and ‘mining and quarrying’ of 5.2 per cent from (-) 4.8 per cent.

On the other hand, ‘manufacturing’ is (-) 1.4 per cent from a YoY rise of 2.1 per cent and construction activity plunged by (-) 2.2 per cent from 6 per cent.

Furthermore, the GVA growth rate of ‘electricity, gas, water supply & other utility services’, ‘trade, hotels, transport, communication and services related to broadcasting’, ‘financial, real estate and professional services’ and ‘public administration, defence and other services’ respectively also declined during this period.

Another key growth gauge — Gross Fixed Capital Formation — which underscores the overall acquisition of produced assets in the economy, at constant (2011-2012) prices, is estimated to have declined to 28.8 per cent from a YoY rise of 31.7 per cent in Q4 of 2018-19.

For 2019-20, the GFCF fell by (-) 2.8 per cent from a YoY rise of 9.8 per cent in the previous fiscal.

Commenting on the GDP data, D.K. Aggarwal, President, PHD Chamber of Commerce and Industry, said: “We are optimistic that the growth will revive in the second half of the financial year 2020-21 on the back of various reform measures announced by the Government during the last few weeks.”

India Ratings & Research’s Chief Economist Devendra Kumar Pant said: “From production side, the growth was driven by agriculture and public administration. Government expenditure has helped both GVA and GDP growth.”

“Going forward, with private expenditure growth dwindling due to the shutdown and labour migration, investment demand contracting due to weak consumption demand and stretched corporate balance sheet, government expenditure will again be the growth engine in FY21.”

According to Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research: “The figures for FY20 largely reflect the intensification of the economic slowdown that started to build up from Q2/Q3 of FY19. The gradual slowdown in the growth trajectory is indicated in the revised quarterly GDP figures and the estimated print for FY20 at 4.2 per cent as compar ed to 6.1 per cent in FY19.”

“Clearly, the growth momentum got further dampened towards the year end due to the economic disruption from the virus outbreak that already started a couple of weeks before the onset of the pan India lockdown in the last week of March.”

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WhatsApp rolls out first-ever global brand campaign in India

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New Delhi, July 4 : WhatsApp on Saturday launched its first brand campaign in India that narrates real stories about how Indians communicate daily on WhatsApp with their closest relationships.

The campaign called ”It”s Between You” gives thrust on WhatsApp”s commitment to privacy, the company said in a statement.

“With WhatsApp”s end-to-end encryption, we come closest to replicating real-life interactions and that”s when we can truly be ourselves. The conversations you have, the jokes you tell and the memories you relive belong to you and deserve to stay between you,” said Avinash Pant, Director, Marketing at Facebook India.

WhatsApp collaborated with Gauri Shinde, a celebrated Indian Bollywood director along with BBDO India to create two 60-seconds ads, each highlighting how WhatsApp”s features like texts, video calls or even a voice message, help replicate in-person conversations and bring people closer.

One ad is based on a true story about an elderly woman and her caregiver, who are now separated from each other.

“From how to bring together the cast and crew that were right for the part and happened to be living together, and directing over a WhatsApp video call, to doing all the post production work without being physically present, it”s been really rewarding,” said Shinde.

The second story is at the other end of the spectrum of emotion, which is a light and fun film about a younger sister giving joyful courage to her elder one through a WhatsApp video call, when the latter feels vulnerable and hesitant to give her a haircut at home.

“WhatsApp is designed to help friends and family communicate as well as help users connect with a business that is important to them,” said the company.

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Govt to levy interest on late payment to MSMEs for GeM purchase

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Nirmala Sitharaman

New Delhi, July 3 : Government departments and agencies will have to pay interest on late payment to vendors, largely MSMEs, for products procured through the Government e-Martketplace (GeM), starting October 1.

Through an office memorandum, the Department of Expenditure of the Ministry of Finance on Friday said that if the payment is not made within 10 days of the Consignee Receipt and Acceptance Certificate (CRAC) being auto generated or issued by the buyer, the concerned department will have to pay interest at the rate of one per cent per month for the delayed payment.

However, this very interest will not go to the MSMEs concerned and instead, will deposited in an account maintained by the GeM, which will be used only for the education of buyers and sellers or public procurement with the prior approval of the Department of Expenditure, said the office memorandum.

“ln order to promote greater discipline and timeliness in payment to vendors, especially #MSMEs, the government has issued an order to levy interest on late payment to vendors on the government e-marketplace. #AatmaNirbharBharat,” said a tweet by Finance Minister Nirmala Sitharaman”s office.

The order will be effective on orders made from October 1, 2020.

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Tomato prices skyrocket to Rs 70/kg in Delhi-NCR

He attributed the hike in the prices of all vegetables and fruits, not only tomatoes, due to the increase in diesel prices, which led to an increase in the transportation cost of vegetables.

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New Delhi, July 3 : With the onset of the monsoon tomato prices soared to Rs 70 per kg in New Delhi and its surrounding areas on Friday.

Crop failure in the rainy season and the late arrival of tomatoes in the mandis (wholesale markets) have led to the price hike. However, the prices are expected to fall after the arrival of the new crop from Himachal Pradesh next week.

A month ago, the price of tomatoes in Delhi’s Azadpur mandi was between Rs 1.25 and Rs 4.75 per kg, while the wholesale price on Friday was Rs 6.44 per kg.

The model rate of tomato was Rs 3 per kg in Azadpur mandi on June 3, which has increased by 10 times to Rs 29 per kg. On July 2, the wholesale price of tomatoes rose to Rs 52 per kg in the mandi, which means there has been an increase of about 995% in the last one month. Due to the rise in wholesale prices, tomatoes were sold at Rs 80 per kg on Thursday in Delhi-NCR and Rs 50.70 per kg in Greater Noida.

Azadpur Agricultural Produce Marketing Committee (APMC) chairman Adil Ahmad Khan said prices have gone up due to late arrival of tomatoes. The quantity of tomatoes received at Azadpur mandi was 528.2 tonne on June 3 while on July 3 it was 281.6 tonne. The quantity has thus been reduced by nearly 50 per cent in a month. Only 241.9 tonne were received on July 2 due to which the wholesale price was Rs 6.52 per kg while the model rate was Rs 32 per kg, Khan added.

He attributed the hike in the prices of all vegetables and fruits, not only tomatoes, due to the increase in diesel prices, which led to an increase in the transportation cost of vegetables.

From next week, the arrival of the new crop from Himachal Pradesh will lead to a decline in the prices of tomatoes. He said at present 90 per cent of the tomatoes in Delhi arrive from Himachal Pradesh while only 10 per cent are received from Haryana and Karnataka.

The consumption of all green vegetables, tomatoes and onions has declined during the past few months because of the shutdown of hotels, restaurants, canteens and dhabas following the nationwide lockdown in the wake of the corona pandemic. This led to a marked fall in prices. The wholesale price of tomatoes had come down to less than one rupee per kg.

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