India on Friday recorded its slowest growth in six years with a GDP of 4.5% in the second quarter of FY19-20.
The previous low was recorded at 4.3 per cent in the January-March period of 2012-13. The Gross Domestic Product (GDP) growth was registered at 7 per cent in the corresponding quarter of 2018-19.
During the six-month period (April-September 2019), the Indian economy grew 4.8 per cent as against 7.5 per cent in the same period a year ago.
The Reserve Bank had lowered the GDP growth projection for 2019-20 to 6.1% from earlier forecast of 6.9%.
While there has been not much of an opportunity for the government to address the topic after the GDP was declared, there have certainly been many discussions and comments made in the past.
Here, we took a look back at all that has been said on the topic recently.
Ravi Shankar Prasad
On October 12, Union Minister Ravi Shankar Prasad cited the box office earnings of three Bollywood movies to underscore his point that the Indian economy is not in a slump.
"I was also told that on October 2, which is observed as one of the national holidays, three Hindi movies garnered Rs 120 crore business on that day. Unless the economy is sound in the country how can only three movies collected so much business in a single day?" Prasad had said while talking to reporters.
He later retracted and clarified that his words had been misconstrued.
Nirmala Sitharaman
The Finance Minister had raised many a proverbial eyebrow when she suggested that usage of Ola and Uber vehicles by millennials was one of the reasons behind the slump in the auto sector.
More recently, speaking in Rajya Sabaha, Finance Minister Nirmala Sitharaman said, "If you look at the economy with a discerning eye, you see that growth may have come down. But it is not a recession yet and won’t be a recession ever."
Replying to a short-duration discussion on the state of the economy in the Rajya Sabha, Sitharaman had said that steps taken by the government post her maiden budget have started bearing fruits and some sectors such as automobiles have shown signs of recovery.
Allaying concerns over revenue position of the government, she had said that direct tax and GST collections have both seen an increase in the first seven months of the current fiscal when compared to the same period of the last year.
She also compared GDP growth during the Narendra Modi-led BJP government since 2014 and that witnessed in the previous five years under the UPA-II regime, saying inflation was below the targeted range, economic expansion was much better and so were other macroeconomic indicators.
Sitharaman blamed the fall in GDP growth in the last two financial years to the lagged effect of twin balance sheet crisis of stress on banks due to non-performing assets (NPAs) or bad loans on the one hand and heavily indebted corporates on the other, resulting from the UPA regime lending.
Rejecting criticism that her maiden budget on July 5 had failed to address concerns of a slowing economy and so had to resort to announcing measures within a month of the passing of the budget by Parliament, she said the Economic Survey and she had recognised the need for recapitalisation of bank and reforms in her budget speech.
Piyush Goyal
Soon after Sitharaman's auto sector comments, Commerce Minister Piyush Goyal said people should not be too concerned with GDP numbers since “maths never helped Einstein discover gravity”.
“Don’t go by all these calculations you see on TV, that if the country has to become a $5 trillion economy, it will have to grow at 12% but right now it is currently growing at 6%-7%,” he advised.
He was talking in context of India meeting a target of $1 trillion in exports in five years.
“Don’t get into those maths; those maths never helped Einstein discover gravity. If he had only gone by structured formulae and what was past knowledge, I don’t think there would have been any innovation in this world,” he said.
Incidentally, soon after Sitharaman's Rajya Sabha comments, Piyush Goyal took to Twitter in support.
"Under the leadership of PM @NarendraModi ji, there has been an increase in India's real GDP growth and an unparalleled decrease in inflation. The reform initiatives have brought affordability, improving the quality of life & ease of living for the masses," he wrote.
KV Subramanian
On Friday, Chief Economic Advisor KV Subramanian said that the fundamentals of the Indian economy continue to be strong and that the goal of achieving a $5 trillion economy by 2024-25, and USD 10 trillion by 2030 was feasible.
"GDP is expected to pick in quarter three," he said.
"The anticipation of demand is what the companies use to make investments and that is how this virtual cycle goes. Over the last few quarters this virtual cycle is not moving as fast as it was when we were growing at 7 per cent plus...," he said at the 'India Economic Forum' Skoch event.
Subramanian said the current situation has provided the government an opportunity to try and bring in important structural reforms.
"I am confident that these important structural reforms that we have undertaken will definitely have an impact on investment and thereby on the other parts of the cycle," the CEA said in his concluding remarks.
