(Representative image)

NEW DELHI: India's gross domestic product (GDP) growth for the April-June (Q1) quarter dropped to over six-year low of 5 per cent from 5.8 per cent in the previous quarter (January-March), data released by government on Friday showed. The slowdown can be largely attributed to sharp decline in manufacturing output, weak consumer demand and private investment, at a time when global trade frictions have dampened business sentiment.

The previous low in GDP growth was recorded at 4.3 per cent in January-March quarter of 2012-13. India's economic growth stood at 8 per cent in the same quarter of 2018-19.

The manufacturing sector witnessed a sharp slowdown as its gross value added slashed to 0.6 per cent in Q1 of 2019-20 from 12.1 per cent in Q1 of 2018-19.

Construction sector gross value added (GVA) growth too slowed to 5.7 per cent from 9.6 per cent earlier.

"GDP at constant (2011-12) prices in Q1 of 2019-20 is estimated at Rs 35.85 lakh crore, as against Rs 34.14 lakh crore in Q1 of 2018-19, showing a growth rate of 5 percent," the National Statistical Office (NSO) said in a statement.

A poll conducted by news agency Reuters showed that the Indian economy likely expanded at its weakest pace in more than five years in the April-June quarter. The slowdown has largely been driven by a fall in household savings and increased bad loans with the banks -- which has hit private investment.

The Reserve Bank had marginally lowered the GDP growth projection for 2019-20 to 6.9 per cent from 7 per cent projected earlier in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.

The government has in the past few days announced a slew of measures aimed at attracting investment to combat the slowdown.

On Wednesday, it approved 100 per cent foreign direct investment in coal mining and also eased rules for sectors including contract manufacturing and single-brand retail. The government eased foreign investment rules, gave concessions on vehicle purchases and encouraged banks to make loans cheaper to spur growth from a five-year low.

Finance minister Nirmala Sitharaman is expected to announce more measures to support sectors like auto -- which saw a 31 per cent decline in sales (biggest decline in nearly two decades) -- and real estate.

Unemployment is at a 45-year high, car sales have slumped the most in almost two decades in July and infrastructure output grew at the slowest pace in more than four years

China's economy reported a GDP growth of 6.2 per cent in April-June quarter. India had already lost its place as the world's fastest-growing major economy to China in the previous quarter (January-March) when it's GDP growth was 5.8 per cent as compared to China's growth of 6.4 per cent.

(With agency inputs)



In Video: GDP growth falls to a 7-year low to 5%