India's economic growth slows to 3.1% in January-March amid COVID-19 crisis

New Delhi: India's economic growth slowed to 3.1 percent in the fourth quarter of the financial year 2019-2020, according to data released by National Statistical Office (NSO) on Friday (May 29) amid ongoing COVID-19 pandemic. The government had imposed a lockdown to curb the spread of coronavirus infections from March 25, 2020.

Notably, the Indian economy got impacted during the January-March quarter due to slowing down economic activities across the world. The economic growth was the lowest since 2008-09 when the economy had expanded at 3.1 percent. 

The NSO data also stated that the nation's Gross Domestic Product (GDP) growth stood at 5.7 percent in the corresponding quarter of 2018-19. During 2019-20, the Indian economy grew at 4.2 percent as against 6.1 percent in 2018-19. 

Earlier, the Reserve Bank (RBI) had pegged the GDP growth for 2019-20 at 5 percent, as projected by the NSO in its first and second advance estimates released in January and February this year.

The CSO had revised downwards growth in the previous October-December quarter of 2019-20 to 4.1 percent from 4.7 percent.

Similarly, the first and second-quarter growth figures were revised downwards to 5.2 percent and 4.4 percent from 5.6 percent and 5.1 percent, respectively.

"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 percent," the NSO said in a statement.

"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 growth in GDP during 2019-20 is estimated at 4.2 percent as compared to 6.1 percent in 2018-19," it said.

The statement said, "The Per Capita Income at current prices during 2019-20 is estimated to be Rs 134,226, showing a rise of 6.1 percent as compared to Rs 1,26,521 during 2018-19." 

Other key points of the CSO data are:

1. Gross value added (GVA) growth in the manufacturing sector contracted by 1.4 percent in the fourth quarter of 2019-20, from 2.1 percent expansion a year ago.

2. Farm sector GVA growth was up at 5.9 percent, compared to 1.6 percent in the corresponding period of 2018-19.

3. Construction sector GVA contracted 2.2 percent from 6 percent expansion earlier. 

4. Mining sector growth came in at 5.2 percent, as against a contraction of 4.8 percent a year ago.

5. Financial, real estate and professional services growth fell to 2.4 percent in Q4 FY20 from 8.7 percent.
 
6. Electricity, gas, water supply, and other utility services segment grew by 4.5 percent in the fourth quarter, against 5.5 percent growth a year ago.

7. Trade, hotel, transport, communication, and services related to broadcasting growth declined to 2.6 percent in the fourth quarter from 6.9 percent earlier.

8. Public administration, defence and other services too saw growth slip to 10.1 percent during the quarter under review, from 11.6 percent a year earlier.

Meanwhile, the data released by the commerce ministry showed that eight core industries contracted by 38.1 percent in April 2020 due to the coronavirus-induced lockdown. 

Senior Congress leader P Chidambaram, however, slammed the central government, saying the latest figures were a "telling commentary on the economic management of the BJP government", adding "Remember, this is pre-lockdown. Of the 91 days of Q4, lockdown applied to only to 7 days."

"We had forecast that GDP for Q4 will touch a new low at below 4 percent. It has turned out to be worse at 3.1 percent," Chidambaram added.