The government on Friday strongly defended the 4.5% GDP growth, saying foundation of Indian economy on all vital statistics is very strong and that GDP growth has bottomed out in Q2.
"We have certainly bottomed out. Market has been at a higher level than in July. During April-October, FDI flows is at 23.86 billion dollar compared to 9.04 billion dollar Y-o-Y. In April-September period, equity, debt capital flows at 2.9 billion dollars and capital flows are precursor to investment. We expect uptick in investment, consumption and investment in coming quarters", Atanu Chakraborty, secretary, DEA, said in a briefing on the GDP Q2 numbers which now stands at 4.5%.
CEA K.V. Subramanian and Chakraborty both said economy will pick up in Q3 and that fundamentals of the economy remain very strong. "Foundation of Indian economy is very strong and globally India is one of the fastest growing economies," they said "We take note of the announcement of the rate of GDP growth. The fundamentals of Indian economy remain strong. The GDP growth is expected to pick up from Q3 of FY 2019-20. IMF has projected India's GDP growth at 6.1 per cent in FY 2019-20 and 7 per cent in FY 2020-21 in its October 2019 report on World Economic Outlook," said Chakraborty.
Subramanian said: "We are saying again that the fundamentals of the Indian economy continue to be strong. GDP is expected to pick in Q3," he said.
"GDP at Constant (2011-12) Prices in Q2 of 2019-20 is estimated at Rs 35.99 lakh crore, as against Rs 34.43 lakh crore in Q2 of 2018-19, showing a growth rate of 4.5 per cent. Quarterly GVA (Basic Price) at Constant (2011-2012) Prices for Q2 of 2019-20 is estimated at Rs 33.16 lakh crore, as against Rs 31.79 lakh crore in Q2 of 2018-19, showing a growth rate of 4.3 per cent over the corresponding quarter of the previous year," the government said in a statement.
Chankraborty further said the government is giving private sector space through disinvestment and there is a mega step for reducing government stake in CPSEs below 51% which has not happened anywhere.
India's economy grew at its slowest pace in over six years in the September quarter mainly on account of weak manufacturing and a drop in exports due to a global slowdown.
Gross Domestic Product (GDP) grew 4.5 per cent in the second quarter of FY20, data released by the government showed, marking the slowest expansion in 26 quarters. In gross value added terms, the economy grew at 4.3 per cent compared to 4.9 per cent in the previous quarter.
In the current GDP series, the lowest growth rate recorded was 4.3 percent in the fourth quarter of FY13. The growth rate for the second quarter of FY20 is the lowest since then.