India's real GDP (Gross Domestic Product) growth during the financial year 2019-2020 is expected at 5% as compared to last year's 6.8%, according to first advance estimates released by the Centre on Tuesday. This estimate is in line with the Reserve Bank of India's (RBI) own revised estimate in December. The economy grew 4.5%, the lowest in six years, in the second quarter (July-September) of this fiscal in weakening from the previous quarter's 4.8%.
Data released by the National Statistical Office (NSO) of the Ministry of Statistics also estimated growth of real GVA (Gross Value Added) in 2019-20 to be 4.9% as against 6.6% in 2018-19. The manufacturing sector is estimated to see a sharp deceleration in growth with just a 2% expansion as against last fiscal's 6.9%. The farming sector is expected to see a marginal slide of 0.1% from the previous year to 2.8%.
The Per Capita Income in real terms (at 2011-12 prices) during 2019-20 is likely to attain a level of ₹96,563 as compared to ₹92,565 for the year 2018-19. The growth rate in Per Capita Income is estimated at 4.3% during 2019-20, as against 5.6% in the previous year. Per capita income measures the average income earned per person in the country in a specified year.
Private domestic consumption, which drives the Indian economy, is expected to marginally raise its share of GDP to 60.2% from last fiscal's 59.4%. Private Final Consumption Expenditure (PFCE) at current prices is estimated at ₹123.07 lakh crore in 2019-20 as against ₹112.90 lakh crore in 2018-19. The current slowdown in the economy is attributed to the fall in consumption levels which has punctured any new appetite of private investments.
Gross Fixed Capital Formation (GFCF) at Current Prices is estimated at ₹57.42 lakh crore in 2019-20 as against ₹55.70 lakh crore of the previous fiscal. This means that as a percentage of GDP, the rate of GFCF is estimated at 28.1% as against the corresponding rates of 29.3%. GFCF is essentially the net investment rate in the economy in assets like machinery, industrial equipment, new technology, etc.
The First Advance Estimates of GDP is typically released a month before the presentation of the Union budget. The estimates are compiled using the Benchmark-Indicator method. The sector-wise estimates are obtained by extrapolation of indicators like levels of industrial production, the financial performance of the private sector, the first advance estimates of crop production, accounts of Central & State Governments and information on indicators like bank deposits and credits, passenger and freight earnings of Railways, airways and waterways, sales of commercial vehicles, etc., available for first eight months of the financial year.