India's second-quarter GDP growth slowed sharply to 4.5 percent, the weakest pace in more than six years, as manufacturing output hit a slump and consumer demand as well as private investment weakened.
The Gross Domestic Product (GDP) expansion rate moderated from 5 percent recorded in April-June 2019 and is much weaker than the 7 percent growth registered in July-September 2018, according to official data released Friday.
The major factor in the GDP fall was manufacturing contracting by 1 per cent. A separate data showed core infrastructure industries' output declining 5.8 per cent in October, the biggest contraction since at least 2005.
The GDP growth rate in the second quarter of the current fiscal year (April to March) is the slowest since January-March 2013 and marks six consecutive quarters of slowing growth -- a first since 2012.
This despite the Narendra Modi-led government taking several steps -- including slashing corporate taxes, setting up a special real-estate fund, merging banks and announcing the biggest privatization drive ever -- to revive investment climate and bolster economic growth.
Also, the Reserve Bank of India (RBI) has cut interest rates five times so far in 2019, by a total of 135 basis points, to boost liquidity in the financial system amid concerns that growth momentum is slowing down. There is an expectation that the central bank may slash interest rate again at its monetary policy meeting next week.
Some surveys show business confidence is at multi-year lows. For the first half of FY 2019-2020, the GDP growth slowed to 4.8 percent, against 7.5 percent recorded in the first half of 2018-19.
To understand the nuances of the numbers and the way forward CNBC-TV18 spoke to Abhishek Upadhyay, senior economist at ICICI Securities PD; Himanshu, professor of Economics at JNU; Pronab Sen, former chief statistician; Soumya Kanti Ghosh, group chief economic advisor at State Bank of India (SBI).