The Indian economy grew at 4.7 percent - its slowest rate in more than six years - in October-December 2019 quarter, according to official data released last week. Immediately after release of the data, Finance Minister Nirmala Sitharaman termed the growth rate as indicative of "steadiness" in the economy. In a similar tone, a top official said that the decline in economic growth has bottomed out. Some economy watchers, however, prefer to take a more cautious approach.
Interestingly, the data furnished by the NSO in the 'Second Advance Estimates of National Income, 2019-20' as well as 'Quarterly Estimates of GDP for Q3, 2019-20', showed revised growth figures for earlier periods. The revision for the September quarter was up sharply from the previous 4.5 percent to 5.1 percent while the NSO revised its growth estimates upward for the June quarter to 5.6 percent. These figures show that the economy is yet to bottom out.
Also, the growth is uneven across sectors. Agro and allied, public administration and mining industries showed healthy performance, but manufacturing, electricity and construction related sectors continued to exhibit contraction. The NSO has forecast manufacturing growth to slip to 2 percent year-on-year in FY20 which is a 15-year low, as against 6.9 percent growth in FY19. Construction growth is seen slipping to a 6-year low of 3.2 percent in FY20 from 8.7 percent in the last fiscal. These figures raise concern.