With the government expecting a 5% growth this year, it would mean a further fall in the last quarter of the year.
The government revised the GDP for the first three quarters of FY18 and FY19. It also did this for the first two quarters of FY20 to show >5% growth in both. But, at 4.7% for Q3FY20, GDP registered its lowest quarterly growth in 27 quarters. With the government expecting a 5% growth this year, it would mean a further fall in the last quarter of the year. GDP in the fourth quarter will have to be 4.6%, if the 5% yearly GDP forecast turns out to be correct. Government expenditure was expected to dip, given the emphasis on fiscal prudence; what is worrying is that gross fixed capital formation has declined for the second quarter straight. Second advanced estimates show that GFCF or investment would be negative for the first time since the revision of base in FY12.
While there is some uptick in agriculture thanks to the monsoon, manufacturing registered a decline from the previous quarter, registering its second fall in 10 quarters. With electricity registering negative growth (-0.7%)—it was 3.9% in the last quarter—and construction coming to a near halt, the government will have a much harder task convincing its critics that it is on the job. More so, when it is being cornered on the social front.