Lok Sabha Question No. 257 (UNSTARRED), answered on 2019-06-24
Subject: GDP Growth
Ministry: FINANCE
Asked by: Abhishek Banerjee, T.N. Prathapan, H. Vasanthakumar, Anto  Antony, Suresh Kodikunnil

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 257

TO BE ANSWERED ON JUNE 24, 2019

## GDP GROWTH

257. SHRI ABHISHEK BANERJEE:

SHRI T.N. PRATHAPAN:

SHRI H. VASANTHAKUMAR:

SHRI ANTO ANTONY:

SHRI KODIKUNNIL SURESH:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Gross Domestic Product (GDP) estimates for the January- March quarter of financial year 2018-19 has been recorded at 5.6 percent which is the lowest growth rate in the past five financial years;
- (b) if so, the details thereof along with the details of GDP during the last five years, year and sector-wise;
- (c) whether the Government has identified the reasons for this and if so, the details thereof;
- (d) whether India has lost its fastest growing economy tag to China after two years and if so, the details thereof and the reasons therefor;
- (e) the  details  of  actions  which  have  been  taken  by  the  Government  to  tackle  the  constant decline of GDP growth rate and boost the same; and
- (f)  the details of reasons for major slowdown in sectors like manufacturing, construction and service sectors?

## ANSWER

FINANCE MINISTER (Ms. NIRMALA SITHARAMAN)

- (a) As per the estimates available from Central Statistics Office (CSO), the growth of Gross Domestic  Product  (GDP)  at  constant  market  prices  was  5.8  percent  in  the  January  to March quarter of 2018-19.
- (b) The details of sector-wise growth rates of Gross Value Added (GVA) at basic prices and GDP at constant market prices during last five years are given in the table below.

| Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   | Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   | Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   | Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   | Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   | Sector-wise Growth of GVA at constant basic prices and GDP at constant market prices (percent)   |
|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
|                                                                                                  | 2014-15                                                                                          | 2015-16                                                                                          | 2016-17 (2 nd RE)                                                                                | 2017-18 (1 st RE)                                                                                | 2018-19(PE)                                                                                      |
| Agriculture &allied                                                                              | -0.2                                                                                             | 0.6                                                                                              | 6.3                                                                                              | 5.0                                                                                              | 2.9                                                                                              |
| Industry                                                                                         | 7.0                                                                                              | 9.6                                                                                              | 7.7                                                                                              | 5.9                                                                                              | 6.9                                                                                              |
| of which Manufacturing                                                                           | 7.9                                                                                              | 13.1                                                                                             | 7.9                                                                                              | 5.9                                                                                              | 6.9                                                                                              |
| Services                                                                                         | 9.8                                                                                              | 9.4                                                                                              | 8.4                                                                                              | 8.1                                                                                              | 7.5                                                                                              |
| GVA at basic prices                                                                              | 7.2                                                                                              | 8.0                                                                                              | 7.9                                                                                              | 6.9                                                                                              | 6.6                                                                                              |
| GDP at market prices                                                                             | 7.4                                                                                              | 8.0                                                                                              | 8.2                                                                                              | 7.2                                                                                              | 6.8                                                                                              |

Source: CSO    Notes: 2 nd RE: Second Revised Estimates, 1 st RE: First Revised Estimates, PE: Provisional Estimates.

(c) The decline in growth rate in fourth (January-March) quarter of 2018-19 was mainly on account of 'Agriculture & allied' and 'Industry' sectors, whose growth rates declined in the fourth quarter, as compared to the preceding quarters in 2018-19.

(d)  India  retained  the  fastest  growing  economy  among  major  economies  tag  in  last  two years. As per estimates of CSO, growth of Indian economy was 7.2 percent in 2017-18 and 6.8  percent  in  2018-19.  It  was  higher  as  compared  to  the  growth  of  Chinese  economy which stood at 6.8 percent in 2017 and 6.6 percent in 2018 (as per the World Economic Outlook, April 2019).

(e) Various steps have been taken to boost the GDP growth which, inter-alia , include; fillip to  manufacturing  via  Make  in  India  programme,  measures  to  improve  ease  of  doing business,  measures  for  regional  connectivity  and  power  sector  via  schemes  like  Ujjwal DISCOM Assurance Yojana (UDAY), and starting of Multi Modal Terminal on River Ganga to  promote  inland  waterways.  Other  measures  include  comprehensive  reforms  in  the foreign direct investment policy and special package for leather & footwear sector, textile & apparel industry. The introduction of the Goods and Services Tax has provided a significant opportunity  to  improve  growth  momentum  by  reducing  barriers  to  trade,  business  and related economic activities. Various other reforms being undertaken by the government in many spheres to improve GDP growth, which among others, include cash transfer scheme 'PM-Kisan'  to  provide  an  income  support  of  Rs.6000/-  per  year  to  small  and  marginal farmer,  historic  support  and  outreach  programme  for  the  Micro,  Small  and  Medium Enterprises (MSME) sector to help the growth, expansion and facilitation of MSMEs across the country.

(f)  Growth  of  manufacturing  sector  in  fourth  quarter  (Q4)  of  2018-19  may  have  been affected by lower production and sales in the auto sector. Construction sector growth in Q4 of  2018-19  may  have  been  affected  by  lower  growth  in  production  of  cement.  Service sector growth in Q4 of 2018-19 was 8.4 percent, higher as compared to all other quarters of 2018-19 and the corresponding quarter of previous year.

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