Gross Value Added, manufacturing in free fall

Mumbai: The Gross Value Added (GVA) growth numbers for the economy paints a grim picture with a free fall from Q1 of 2018-19 when it was 7.7% to the current number of 4.3% in Q2 of 2019-20.

The precipitous fall in GVA growth rates is alarming for the economy as a whole and the manufacturing sector in particular.

According to quarterly estimates of Gross Value Added (GVA) for the second quarter (July-September), Q2 of 2019-20 registered a growth of 4.3% compared to 6.9% in the Q2 of 2018-19, the corresponding period last year. This marks a steep drop in growth rates within a one year period.

Since Q1 of 2018-19, when the GVA was at 7.7%, the GVA has been falling every quarter since then.

It dropped to 6.9% in Q2, 6.3% in Q3 and 5.7% in Q4. In the current financial year year, 2019-20, it came down further to 4.9% in Q1 and the latest reading released on Friday is 4.3%.

Within the overall GVA pie, the big crash has come in the manufacturing sector. It has contracted by 1% as compared to a strong growth of 12.1% in Q1 of 2018-19. This is a very disturbing trend for manufacturing to crash from 12% plus rates to a negative growth of 1% within six quarters.

The chart mirrors the trend of overall GVA in coming down every quarter from Q1 of 2018-19. From 12.1% in that quarter, it came down to 6.9% in Q2, 6.4% in Q3 and then a massive crash in Q4 to 3.1%.

In the current financial year, it has been in free fall and from 3.1% in Q4 fell heavily to 0.6% and for the current quarter has contracted by 1% to end in negative territory.

(To view our epaper please click here. For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in