India's Q3 FY20 GDP growth at 4.7%; earlier growth rates revised

New Delhi: Slowdown continued to hamper India's economic activity as 2019-20 third quarter GDP growth rate was recorded at 4.7 per cent from the revised estimate of 5.1 per cent reported for the previous quarter.

India's GDP growth during 2019-20 has been estimated at 5 per cent as against 6.1 per cent in 2018-19.

On Friday, the data furnished by the National Statistical Office (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.

As per the data, the revised second quarter GDP growth rate stood at 5.1 per cent from the earlier 4.5 per cent.

Other revisions include the year-on-year growth rate of 5.6 per cent in Q3 2018-19 from an earlier estimate of 6.6 per cent.

The 4.7 per cent growth would be the slowest rate of expansion in around last six years.

On a sequential basis, the growth rate came at 7.1 per cent in Q1 of 2018-19, followed by 6.2 per cent in Q2 in the same fiscal and 5.6 in Q3 FY19. In 2019-20, the revised figures showed that growth stood at 5.6 per cent in Q1, 5.1 per cent in Q2, and 4.7 per cent in Q3.

"Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2019-20 is estimated to attain a level of Rs 146.84 lakh crore, as against the 'First Revised Estimate of GDP' for the year 2018-19 of Rs 139.81 lakh crore, released on 31st January 2020," the NSO said.

"GDP at Constant (2011-12) Prices in Q3 of 2019-20 is estimated at Rs 36.65 lakh crore, as against Rs 35 lakh crore in Q3 of 2018-19, showing a growth of 4.7 per cent," it added.

Furthermore, the NSO data showed that Gross Value Added (GVA) growth rate during the third quarter of 2019-20 on a YoY basis fell to 4.5 per cent from 4.8 per cent in Q2 and 5.6 per cent during the like period of the previous fiscal.

The GVA includes taxes, but excludes subsidies.

"The 'Per Capita Income' in real terms (at 2011-12 prices) during 2019-20 is estimated to attain a level of Rs 95,706 as compared to Rs 92,085 in the year 2018-19, giving a growth of 3.9 per cent during 2019-20, as against 4.8 per cent in the previous year.

"The 'Per Capita Income at current prices during 2019-20' is estimated to be Rs 134,432, showing a rise of 6.3 per cent as compared to Rs 1,26,521 during 2018-19," the NSO said.

Moreover, the data showed a sharp contraction of 5.2 per cent in the gross fixed capital formation in Q3 FY20.

On sector-specific basis, agro and allied, public administration and mining industries showed healthy performance, whereas manufacturing, electricity and construction related sectors continued to exhibit contraction.

"Contrary to our expectations that the GDP growth had bottomed out in Q2 FY2020, the initial growth print of 4.7 per cent for Q3 FY2020 reveals that the slowdown continued in the just-concluded quarter, relative to the upwardly revised growth for Q1 FY20 and Q2 FY20," said Aditi Nayar, Principal Economist at ICRA.

According to M. Govinda Rao, Chief Economic Advisor, Brickwork Ratings: "With the government spending likely to be constrained in the fourth quarter due to constraints on fiscal space and in the absence of strong green shoots, we don't expect much improvement in the fourth quarter of 2019-20."

Karan Mehrishi, Lead Economist at Acuite Ratings & Research, said: "Q3 print is in line with our expectations. Even though a favourable base did play a role in the slight improvement in quarterly value added, it is heartening to see green shoots in household consumption and capital formation.

"Nevertheless, a tight fiscal space is constricting public expenditure, which has reported a lower contribution of GDP this quarter."