The National Statistical Office released the estimates for the Gross Domestic Product (GDP) for the first quarter of FY 2019-2020 on Friday. India's GDP grew at a mere 5% over the three months, a drastic fall from the 8% growth rate observed during the same period in FY '18-'19. The latest numbers published on Friday highlight that the economy grew at it's slowest rate in six and a half years. The growth rate fell by 0.8% on a quarter-on-quarter basis. 

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Fall in the growth of core sectors

The growth numbers of various core sectors such as 'Manufacturing', 'Construction', 'Agriculture, Forestry and Fishing' have taken a heavy beating. The Manufacturing sector grew at 0.6%, showcasing almost no growth and decreasing by 11.5% on a YoY basis. Construction grew at 5.7%, falling from 9.6% on a YoY basis. Agriculture, Forestry and Fishing grew at 2%, as compared to 5.1% on a YoY basis. The Wholesale Price Index (WPI) grew by 6.9%, Private Final Expenditure (PFCE) at Current and Constant Prices is estimated to be 57.7% and 55.1% in FY '19-20 as opposed to 58.7% and 56.1% in '18-19.

The Reserve Bank of India released its annual report on Thursday saying that it was "difficult to diagnose the reason or nature for the slowdown". It said, "The diagnosis is difficult, these conditions are hard to disentangle cleanly, at least in the formative state”.

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CEA: "Government taking steps to boost economy"

Shortly after the numbers were released, Chief Economic Advisor K. Subramanian addressed a press conference in which he said that the government has been taking proactive steps to fight the economic slowdown, with the measures taken by the Finance Minister as well as the Cabinet being a reflection of the same. The CEA then listed other measures taken by the government such as reforms related to market access, the resolve of the government to further develop the bond market. He added that monetary authorities have also taken necessary steps to improve the growth impulse by lowering the interest rates.

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CEA Subramanian added, "These measures not only remove bottlenecks in the part of growth but also show quick response of the government after extensive discussion with all the stakeholders which will continue in the future as well". He added, "The underlying robustness of the Indian economy is borne out by low inflation, focus spending for the common man and the continuing resolve and momentum on the reform path especially structural reforms". He concluded the statement by saying that "The Government of India remains committed to retaining its glide path to the fiscal deficit which is an indication of fiscal and monetary strength."