On November 29, immediately after the National Statistical Office (NSO) came out with the second-quarter GDP growth numbers – 4.5 per cent, a six-year low – the government went into damage control. Atanu Chakraborty, Secretary, Department of Economic Affairs, and K. Subramanian, Chief Economic Advisor, addressed a hurriedly called media briefing.
The government’s usual comforting words were that the fundamentals of the economy are still strong, growth has bottomed out and that the growth rate from the next quarter would improve. A day before the second-quarter numbers were announced, Nirmala Sitharaman told the Rajya Sabha that “if you are looking at the economy with a discerning view, you see that the growth may have come down but it is not a recession yet or it won’t be a recession ever.”
While technical differences between a slowdown and a recession are debatable, the fact that the growth of nominal GDP (measure of goods and services produced at current prices) has fallen sharply to 6.1 per cent in the second quarter, from the Budget target of 12 per cent, should worry the government and people at large.
Even on the real GDP front, if government consumption – which showed a 15 per cent jump in the second quarter and more or less supported overall growth – is taken out of the equation, the situation looks even worse. “For some time there was support from some sectors that are cycle independent like agriculture and government spending. The ex-agriculture and ex-government spending numbers indicate a core trend in the economy which is worse. It is not even 4.5 per cent,” says Siddhartha Sanyal, Chief Economist and Head of Research, Bandhan Bank.
This story is from the December 29, 2019 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 29, 2019 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
The Dark Side Of Gold Loans
There Has Been A Sharp Rise In Gold Loans In Recent Years. But There Is A Seedier Side To This, As Is Evident From The Red Flag The RBI Raised Recently. Will The Regulator's Move Protect Customers?
All That Glitters
The price of gold has been rising unabated. It has soared to more than 73,000 per 10 gm in 2024 from *31,000 in early 2018. Is the rally sustainable or is this a bubble?
"Hire for attitude, not ability"
Thryve Digital is a player in the healthcare technology sector delivering next-generation solutions
Road Warrior
For Khalid Wani, Senior Director of Sales at Western Digital India, life is much more than just the corner office. Biking across the world is one way he derives meaning for his life
WIDENING THE POOL
THERE HAS BEEN A JUMP IN INDIVIDUALS INVESTING DIRECTLY IN THE STOCK MARKETS, BUT MUMBAI AND AHMEDABAD STILL ACCOUNT FOR THE LION'S SHARE. THERE DEFINITELY IS SCOPE FOR IMPROVEMENT IN TERMS OF PENETRATION LEVELS ACROSS THE COUNTRY
CRISIS IN THE CLOUDS
INDIAN AVIATION IS IN CRISIS. AIRLINES ARE GRAPPLING WITH FLIGHT CANCELLATIONS, CREW SHORTAGES, AND COMPLAINTS ABOUT POOR SERVICE, ARE BLEEDING DUE TO RISING COSTS WILL THE FASTEST-GROWING AVIATION MARKET RECOVER?
"India should start privatising public sector banks"
Arvind Panagariya, Chairman of the 16th Finance Commission, on growth, inequality, jobs, the banking sector, and more
"I LET MY WORK DO THE TALKING"
Megha Engineering & Infrastructures MD P.V. Krishna Reddy on being low profile, the infra opportunity and much more
"Core of insurance lies in long-term security"
Vibha Padalkar, MD & CEO of HDFC Life, on the insurance provider's performance, surrender charges, and future innovations
Distress in the Books
Bandhan Bank, the brainchild of Chandra Shekhar Ghosh, has made the journey from an MFI to a bank, but with many hurdles. Now with his resignation as MD & CEO, is the lender staring at more uncertainty?