National Statistical Office (NSO) released the first advance estimates of the national income that projected growth in India’s GDP at market prices for 2019-20 at 4.98% in “real” terms, the lowest since the 3.89% in the global financial crisis year of 2008-09. But even more significant was the estimated growth of 7.53% in “nominal” terms, which is the lowest since the 7.35% for 1975-76.
This is concern because of the following reason:
- The growth rate is against the target of 5 trillion economy by 2024. Minimum growth rate of 12% is required to achieve the target.
- It shows slower growth rate of Production and Prices.
- Low prices means low salaries and hence low investment.
- The low nominal GDP growth rate means low taxes and hence small room for Government to work.
- The government will be under more pressure to adhere to the fiscal deficit target.