New figures of India’s economic growth rate have also come. According to these figures, India’s GDP growth rate was 4.2 per cent in FY 2019-20. This is the lowest speed of economic development in the last 11 years. India’s economic growth rate was 5.2 per cent in the first quarter of the financial year 2019-20. Which decreased to 4.4 per cent in the second quarter and 4.1 per cent in the third quarter. But in the fourth and last quarter, it fell to just 3.1 per cent. That is, between January to March this year, India’s economy grew at a pace of only 3.1 per cent. Overall, India’s economy has grown at a rate of 4.2 per cent in this financial year, whereas India’s growth rate was 6.1 per cent in 2018-19.
In India, the first lockdown was announced in the last week of March. And due to the same effect, the economic growth rate has decreased slightly in the last quarter. But in April and May, all the industries in India remained completely closed, so the growth rate is expected to be less in the coming quarter.
Meanwhile, the fiscal deficit of the Government of India has also increased to 4.59 per cent of GDP. The government’s goal was to keep this deficit down to 3.8 per cent. It is also called Fiscal Deficit in English. This is the difference between the government’s earnings and its spending. That is, if the government is earning 100 rupees then it has to spend about 104 rupees and 59 paise. Under this, the government had targeted to earn 18 lakh 50 thousand crore rupees by 31 March this year, but the government had achieved only 16 lakh 82 thousand crore rupees.
India’s economic growth rate has reduced but these figures of GDP are much better than earlier estimates. For example, State Bank of India, India’s largest state-run bank, had projected GDP to grow at 1.2 per cent between January and March this year. Similarly, The Asian Development Bank had estimated that India’s economic growth rate will be 4 per cent in 2019-20, while it is now 4.2 per cent. However, before the budget, the central government had estimated that India’s GDP will grow at a rate of 5 per cent in 2019-20 and the growth rate is less in the latest figures. But compared to many countries, the situation in India is still much better.
India’s growth rate has fallen by only 0.8 per cent from the estimate, while the economy of America has dropped by 5 per cent during this period. According to the data of the first quarter of this year, the US economy is currently in minus.
Economic Condition is much gloomy in Neighboring Countries
The condition of China’s neighbouring country China is even worse. China’s GDP declined by 6.8 per cent in the first three months of this year. China started releasing GDP figures from 1992 and this is the biggest decline since then.
You will be surprised to know that until 1987, the GDP of India and China were almost equal. But today China’s GDP is 5 times more than India. But now Coronavirus has given India an opportunity to change this situation again.
Germany’s economy has also shrunk by 2.2 per cent in the first quarter of this year. France’s GDP growth rate also declined by 5.8 per cent between January and March. This is the biggest decline in French GDP since 1949.
Meanwhile, Spain’s GDP growth rate has decreased by 5.2 per cent. This is the biggest economic decline in Spain in nearly 100 years. At the same time, Italy’s GDP grew at a pace of just 0.1 per cent.
That is, when the economic growth rate of most of the countries in the world is in minus or has stopped completely, then the economic growth rate in India remains positive. However, when the figures for the next quarter are released, the effect of the lockdown can be accurately estimated. Reserve Bank of India i.e. RBI has also said that in future, India’s economic growth rate can also go to minus.
Earlier in the years 1957-58, 65-66, 1972-73 and 79-80, India’s economic growth rate has gone to minus, and if in the next financial year even then this growth rate remains in minus then in about 30 years The first time will be when India’s economy will start shrinking instead of growing.
But the financial year 2019-20 has been successful in falsifying most of the estimates and it should be expected that something like this happens in the next financial year also. But will it be possible?