Indian economy grew at its slowest pace in over 10 years in the last financial year. At 4.2 percent, the growth rate was the lowest since the 2008 financial crisis. The key drags have been manufacturing which was flat; a construction which came in at a mere 1.3 percent; trade hotels and transport which grew at just 3.6 percent and financial sector which grew by 4.6 percent versus 6.8 percent year ago. Only public administration which grew by 10 percent and agriculture which grew by 4 percent has helped.
Firstly because the government admits it didn't get much of the data for the fourth quarter; but more importantly because the CSO has dramatically revised lower the GDP for the first 3 quarters. The Q1 GDP is down to 5.2 percent from 5.6 percent earlier; Q2 GDP is down to 4.4 percent from 5.1 percent earlier while Q3 is down to 4.1 percent from 4.7 percent earlier. GDP numbers are usually revised after one full year when the government has the full data from unlisted units. The mid-stream revision seems to strikes at the credibility of the GDP data.
Separately the government has also released the FY20 tax and expenditure numbers which shows that the fiscal deficit last year was at 4.59 percent, not 3.8 percent as claimed by the budget in February.
So what do all this say about the state of the economy and the ability of the government to respond? To discuss this, Latha Venkatesh spoke to Pronab Sen Former Chief Statistician, Sudipto Mundle Ex-Chairman of National Statistics Commission, and Soumya Kanti Ghosh Group CEA of SBI.