Is Indian economy looking at a new low?
Slowdown Vs Recession
While GDP growth has been slipping for five consecutive quarters now, it's still a slowdown and not yet a recession. That's because a recession means a contraction in GDP for two consecutive quarters.
The GDP growth for the July-September quarter has slipped to 4.5%.
Let's have a look at the major indicators that fulled this.
In October it breached the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since July 2018 due to higher food prices even though RBI had predicted that food prices "are likely to moderate as winter supplies enter the market".
The core issue
Economists said the sharp contraction showed the severity of the industrial slowdown and a recovery may take time.
Dear GST kitty
The revenue during September, 2019 has declined by 2.67% in comparison to the revenue during September, 2018.
During April-September, 2019 vis-à-vis 2018, the domestic component has grown by 7.82% while the GST on imports has shown negative growth and the total collection has grown by 4.90%
The ratings agency highlighted that core industries have witnessed “virtually negative growth in headcount”, with crude oil just about maintaining the employment level. These industries have been impacted by the slowdown in GDP growth as well as the challenges on the NPA side for banks.