'Worst is not behind us': Experts say Modi's $5 trillion dream set back by a year

India's GDP growth rate fell to 4.5% in the second quarter of FY20 -- a six year low. However, experts say that the worst might not be behind us.

According to an IANS report, former Chief Statistician of India, Pronab Sen believes that the manufacturing showing negative growth is certainly worrying.

"I don't think the growth has bottomed out, the growth figures may continue to decline the next quarter too, however, post fourth quarter may show some recovery owing to the base effect," Sen said.

On the divergence seen in the stocks markets, currently around record levels, Sen said: "It is essentially in reaction to the corporate tax cut".

In spite of a slew of governmental measures aimed at reviving growth, the Indian economy seems to be on a downward trajectory.

Former Finance Secretary Subhash Chandra Garg said that technically speaking India is not in recession.

"Technically India is not in a recession as defined in the context of advanced economies which grow at only 0-3% normally. For the emerging market leader economy of India, which has grown in excess of 7.5% per annum for 20 years, a full year growth of less than 5% of is more like a recession than a slowdown," he wrote in a blog post.

Speaking on the $5 trillion dollar economy target, Garg opined that the goal may have slipped by a year.

"India has rightly declared its ambition to be a $5 trillion dollar economy by 2024-25 and a $10 trillion dollar economy by early 2030s. The goal of $5 trillion dollar economy by 2024-25 seems to have slipped by a year given this year’s tepid growth of less than 5%," he wrote.

Speaking to Livemint, Sen adds, "The effect on the corporate sector began only late last year. So we are still seeing the process unfolding. This is unlikely to bottom out for at least the next few quarters."

He opines that GDP growth is not yet out of the woods. He is of the opinion that the non-corporate sector may take time to pick up because the problems being faced by the financial sector. This entire process, he believes, will not happen in the next few quarters.

But not everyone is of the same mind. As IANS reports, NR Bhanumurthy, Professor at the National Institute of Public Finance and Policy believes that the GDP growth has bottomed out and we may see revival ahead.

"Such low growth figures were not expected. Led by the service sector, we can see a revival in the next quarter".

Deepthi Mary Mathew, economist at Geojit Financial Services, also said that the GDP growth rate for Q2FY20 was in line with the market expectation at 4.5 per cent. All the indicators ranging from IIP, electricity consumption to core inflation rate were pointing towards the fact that the economy has not entered the revival path.

Sreejith Balasubramanian, Economist-Fund Management, IDFC AMC, noted that "bottoming out could be further down the road and recovery is unlikely to be V-shaped as consumer demand, credit supply and risk appetite remain lacklustre".

(With IANS inputs)India's GDP growth rate fell to 4.5% in the second quarter of FY20 -- a six year low. However, experts say that the worst might not be behind us.

According to an IANS report, former Chief Statistician of India, Pronab Sen believes that the manufacturing showing negative growth is certainly worrying.

"I don't think the growth has bottomed out, the growth figures may continue to decline the next quarter too, however, post fourth quarter may show some recovery owing to the base effect," Sen said.

On the divergence seen in the stocks markets, currently around record levels, Sen said: "It is essentially in reaction to the corporate tax cut".

In spite of a slew of governmental measures aimed at reviving growth, the Indian economy seems to be on a downward trajectory.

Former Finance Secretary Subhash Chandra Garg said that technically speaking India is not in recession.

"Technically India is not in a recession as defined in the context of advanced economies which grow at only 0-3% normally. For the emerging market leader economy of India, which has grown in excess of 7.5% per annum for 20 years, a full year growth of less than 5% of is more like a recession than a slowdown," he wrote in a blog post.

Speaking on the $5 trillion dollar economy target, Garg opined that the goal may have slipped by a year.

"India has rightly declared its ambition to be a $5 trillion dollar economy by 2024-25 and a $10 trillion dollar economy by early 2030s. The goal of $5 trillion dollar economy by 2024-25 seems to have slipped by a year given this year’s tepid growth of less than 5%," he wrote.

Speaking to Livemint, Sen adds, "The effect on the corporate sector began only late last year. So we are still seeing the process unfolding. This is unlikely to bottom out for at least the next few quarters."

He opines that GDP growth is not yet out of the woods. He is of the opinion that the non-corporate sector may take time to pick up because the problems being faced by the financial sector. This entire process, he believes, will not happen in the next few quarters.

But not everyone is of the same mind. As IANS reports, NR Bhanumurthy, Professor at the National Institute of Public Finance and Policy believes that the GDP growth has bottomed out and we may see revival ahead.

"Such low growth figures were not expected. Led by the service sector, we can see a revival in the next quarter".

Deepthi Mary Mathew, economist at Geojit Financial Services, also said that the GDP growth rate for Q2FY20 was in line with the market expectation at 4.5 per cent. All the indicators ranging from IIP, electricity consumption to core inflation rate were pointing towards the fact that the economy has not entered the revival path.

Sreejith Balasubramanian, Economist-Fund Management, IDFC AMC, noted that "bottoming out could be further down the road and recovery is unlikely to be V-shaped as consumer demand, credit supply and risk appetite remain lacklustre".

(With IANS inputs)India's GDP growth rate fell to 4.5% in the second quarter of FY20 -- a six year low. However, experts say that the worst might not be behind us.

According to an IANS report, former Chief Statistician of India, Pronab Sen believes that the manufacturing showing negative growth is certainly worrying.

"I don't think the growth has bottomed out, the growth figures may continue to decline the next quarter too, however, post fourth quarter may show some recovery owing to the base effect," Sen said.

On the divergence seen in the stocks markets, currently around record levels, Sen said: "It is essentially in reaction to the corporate tax cut".

In spite of a slew of governmental measures aimed at reviving growth, the Indian economy seems to be on a downward trajectory.

Former Finance Secretary Subhash Chandra Garg said that technically speaking India is not in recession.

"Technically India is not in a recession as defined in the context of advanced economies which grow at only 0-3% normally. For the emerging market leader economy of India, which has grown in excess of 7.5% per annum for 20 years, a full year growth of less than 5% of is more like a recession than a slowdown," he wrote in a blog post.

Speaking on the $5 trillion dollar economy target, Garg opined that the goal may have slipped by a year.

"India has rightly declared its ambition to be a $5 trillion dollar economy by 2024-25 and a $10 trillion dollar economy by early 2030s. The goal of $5 trillion dollar economy by 2024-25 seems to have slipped by a year given this year’s tepid growth of less than 5%," he wrote.

Speaking to Livemint, Sen adds, "The effect on the corporate sector began only late last year. So we are still seeing the process unfolding. This is unlikely to bottom out for at least the next few quarters."

He opines that GDP growth is not yet out of the woods. He is of the opinion that the non-corporate sector may take time to pick up because the problems being faced by the financial sector. This entire process, he believes, will not happen in the next few quarters.

But not everyone is of the same mind. As IANS reports, NR Bhanumurthy, Professor at the National Institute of Public Finance and Policy believes that the GDP growth has bottomed out and we may see revival ahead.

"Such low growth figures were not expected. Led by the service sector, we can see a revival in the next quarter".

Deepthi Mary Mathew, economist at Geojit Financial Services, also said that the GDP growth rate for Q2FY20 was in line with the market expectation at 4.5 per cent. All the indicators ranging from IIP, electricity consumption to core inflation rate were pointing towards the fact that the economy has not entered the revival path.

Sreejith Balasubramanian, Economist-Fund Management, IDFC AMC, noted that "bottoming out could be further down the road and recovery is unlikely to be V-shaped as consumer demand, credit supply and risk appetite remain lacklustre".

(With IANS inputs)

According to an IANS report, former Chief Statistician of India, Pronab Sen believes that the manufacturing showing negative growth is certainly worrying.

"I don't think the growth has bottomed out, the growth figures may continue to decline the next quarter too, however, post fourth quarter may show some recovery owing to the base effect," Sen said.

On the divergence seen in the stocks markets, currently around record levels, Sen said: "It is essentially in reaction to the corporate tax cut".

In spite of a slew of governmental measures aimed at reviving growth, the Indian economy seems to be on a downward trajectory.

Former Finance Secretary Subhash Chandra Garg said that technically speaking India is not in recession.

"Technically India is not in a recession as defined in the context of advanced economies which grow at only 0-3% normally. For the emerging market leader economy of India, which has grown in excess of 7.5% per annum for 20 years, a full year growth of less than 5% of is more like a recession than a slowdown," he wrote in a blog post.

Speaking on the $5 trillion dollar economy target, Garg opined that the goal may have slipped by a year.

"India has rightly declared its ambition to be a $5 trillion dollar economy by 2024-25 and a $10 trillion dollar economy by early 2030s. The goal of $5 trillion dollar economy by 2024-25 seems to have slipped by a year given this year’s tepid growth of less than 5%," he wrote.

Speaking to Livemint, Sen adds, "The effect on the corporate sector began only late last year. So we are still seeing the process unfolding. This is unlikely to bottom out for at least the next few quarters."

He opines that GDP growth is not yet out of the woods. He is of the opinion that the non-corporate sector may take time to pick up because the problems being faced by the financial sector. This entire process, he believes, will not happen in the next few quarters.

But not everyone is of the same mind. As IANS reports, NR Bhanumurthy, Professor at the National Institute of Public Finance and Policy believes that the GDP growth has bottomed out and we may see revival ahead.

"Such low growth figures were not expected. Led by the service sector, we can see a revival in the next quarter".

Deepthi Mary Mathew, economist at Geojit Financial Services, also said that the GDP growth rate for Q2FY20 was in line with the market expectation at 4.5 per cent. All the indicators ranging from IIP, electricity consumption to core inflation rate were pointing towards the fact that the economy has not entered the revival path.

Sreejith Balasubramanian, Economist-Fund Management, IDFC AMC, noted that "bottoming out could be further down the road and recovery is unlikely to be V-shaped as consumer demand, credit supply and risk appetite remain lacklustre".

(With IANS inputs)

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