Finance Ministry Report Indicates Slump In Growth, At 7 Percent Lowest In 5 Years

A finance ministry report has said that Indian economy appears to have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports.

The Central Statistics Office, which released the national account data for the third quarter, had in February revised downwards the growth estimate for 2018-19 fiscal to 7 per cent from 7.2 per cent. The 7 per cent growth is the lowest in 5 years.

In its monthly economic report for March, the finance ministry said monetary policy has attempted to provide a fillip to the growth impulse through cuts in repo rate and easing of bank liquidity.

“India’s economy appears to have slowed down slightly in 2018-19. The proximate factors responsible for this slowdown include declining growth of private consumption, tepid increase in fixed investment, and muted exports,” it said.

The ministry, however, said that India continues to remain the fastest growing major economy and is projected to grow faster in the coming years.

Talking of challenges, the ministry highlighted that growth in agriculture sector needs to be reversed.

“The real effective exchange rate has appreciated in Q4 (January-March) of 2018-19 and could pose challenges to the revival of exports in the near future,” it said.