India’s economic growth drops to just 5.8% in Jan-March quarter | Falls behind China for the first time in two years.
India was the world’s fastest growing economy banking on a billion strong consumer base. But the two-month long election campaign and increasing NPAs have put heavy stress on the Government and RBI to rescue the drubbing rupee.
- Indian economy suffered from slowing growth and grew at a ‘much-lower-than-expected’ 5.8% in the January-March period on 2019.
- The rate is the slowest in 17 quarters, which has resulted in India falling behind China for the first time in almost two years.
- A poll of economists conducted by Reuters predicted growth rate at 6.3 percent for the quarter, down from 6.6 % in October-December 2018.
- The statistics ministry also revised its projections of economic growth for the fiscal year from earlier estimates of 7.0% to an underwhelming 6.8%.
The sluggish trajectory will add to the woes of India’s developing economy which is still reeling from impact of a number of financial policies and global trade war. Re-elected Prime Minister Narendra Modi and the Reserve Bank of India (RBI) have their task cut out to catalyze the slowing growth.
Bigger majority, greater responsibility
The government will look to provide impetus through fiscal initiatives and lowering interest rates. With an increased majority, Modi-led BJP government has added pressure to take the onus and revive the downward growth rate.