NEW DELHI: Confirming fears that India may be up against a protracted slowdown, official data released on Friday showed the country’s GDP growth nose-dived to a 7-year low as muted consumer demand, turmoil in the NBFC sector, and global trade spats hurt the economy.
While economists were not expecting robust numbers, they were alarmed as India’s growth in Q1 was lower than China’s 6.2% for the same period, which was the country’s lowest in three decades.
It also means the government’s plan to grow India’s economy to $5 trillion over the next five years may not be easy.
According to M Govinda Rao, former member of the Prime Minister’s Economic Advisory Council, the $5-trillion target will remain “a distant dream”.
“We’ve been talking of slowdown in demand for long and today’s figures only underline it. The manufacturing sector has grown just 0.6%, compared to 12.1% in the same period last year. It shows the problem has deepened. People are not buying. The government should now seriously look at structural reforms including in the labour and land markets as a way out of this morass,” he said.