The development has come as a setback on day one of the Narendra Modi government’s second term, which held its first Cabinet Meet on Friday in the national capital. The worry is stagnancy in sectors like manufacturing, mining, and agriculture as unemployment rates reached 6.1 percent last year.
New Delhi (Sputnik): India’s Gross Domestic Product (GDP) fell to 5.8 percent in the last quarter of the financial year 2018-19, which is way short of China’s 6.4 percent in the same period. It was a five-year low for India in the fourth quarter. Also, this is the first time in the last two years that India’s growth has fallen behind its rival China.
“GDP at Constant (2011-12) Prices in fourth quarter ended in March 2019 showing a growth rate of 5.8 percent… annual growth in 2018-2019 is 6.8 percent”, the Government revealed in an official statement.
Sectors like construction (8.7 percent), financial, real estate and professional services (7.4 percent), electricity, gas, water supply and other utility services (7.0 percent) provided some relief to the Indian economy. While the employment-oriented sectors like agriculture (2.9 percent), mining (1.3 percent), manufacturing (1.3 percent) witnessed massive declines that could pose major challenges for Prime Minister Modi who was re-elected with a commanding majority following the parliamentary elections 2019.
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Meanwhile, India’s apex bank — the Reserve Bank of India — is widely expected to cut its key interest rate — currently at 6% — for the third time this year at a meeting slated for next week. It is expected to push spending, which economic growth data suggests has stalled as consumer as well as industries tightened their belts. The central bank lowered the rate by 25 basis points in February and April.