The crisis brewing within India’s economy is no longer a secret. And it has gained unanimous acceptance by now. The GDP growth rate was a meagre five per cent during the April-June quarter – lowest in the last six years.
The GDP growth figures come as a shocker and give rise to the belief that the slowdown might just be long term in nature, showing bleak signs of improvement. “We are growing at a slower rate than we were growing earlier. We are seeing a cyclical slowdown in the production activity in the economy,” said Harendra Kumar, Managing Director and Head, Institutional Equities & Global Research, Elara Capital.
A spurt in the instances of job losses within the automobile sector after its stocks hit badly led to a general acceptance of the overall economic slowdown. India’s auto sector, which contributes 49 per cent to the country’s manufacturing GDP is traversing through a rugged patch. Sales of Maruti Suzuki - India’s largest carmaker fell by 36.1 per cent in August 2019. Other carmakers also recorded a sharp negative growth in sales.
“The high-frequency economic indicators across various sectors continue to point towards an entrenched slowdown, as private investment, consumption, and exports show no signs of a pickup,” commented Upasana Bhardwaj, Vice President and Senior Economist at Kotak Mahindra Bank.
This story is from the October 2019 edition of Outlook Money.
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This story is from the October 2019 edition of Outlook Money.
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