The government on Friday sharply revised downwards the GDP growth rate for FY19 just ahead of budget 2020. The government revised downwards the economic growth rate for 2018-19 to 6.1 per cent from 6.8 per cent estimated earlier, mainly on account of deceleration in mining, manufacturing and farm sectors. These revisions are generally routine exercise and the government on Friday released the First Revised Estimates for 2018-19, the Second Revised Estimates for 2017-18 and the Third Revised Estimates for 2016-17. “Real GDP or GDP at constant (2011-12) prices for the years 2018-19 and 2017-18 stand at Rs 139.81 lakh crore and Rs 131.75 lakh crore, respectively, showing growth of 6.1 per cent during 2018-19 and 7.0 per cent during 2017-18,” the National Statistical Office said in revised national account data released on Friday.
Since most accurate data arrives with a lag, these revisions hold weight especially for sectors such as agriculture. The downward revision is generally due to sharp cuts in primary sectors including agriculture, forestry, fishing, mining and quarrying. Even the growth in the secondary sector including manufacturing, construction, electricity and others has been revised downwards. During 2018-19, at constant prices, the growth rates of primary (comprising agriculture, forestry, fishing and mining & quarrying), secondary (comprising manufacturing, electricity, gas, water supply & other utility services, and construction) and tertiary (services) sectors have been estimated at 1.0 per cent, 6.0 per cent and 7.7 per cent, as against 5.8 per cent, 6.5 per cent and 6.9 per cent, respectively, in the previous year.
The sharp cuts also show that the Modi government has stayed behind the curve in gauging the slowdown taking hold on the economy during FY19. It’s also to be seen if the downward revision impacts the growth rate in FY20. Meanwhile, Finance Minister Nirmala Sitharaman is slated to present budget 2020 at 11 am today.