<p>India's economic growth fell further to 4.5% in the July-September period from 5% in January-March dragged down by an almost stalled manufacturing growth, weak private investment and weaker consumption.</p>.<p>But the government spends grew at a handsome 15%, contributing majorly to the headline gross domestic product (GDP) number, which otherwise would have looked much weaker.</p>.<p>With the current decline, India also lost the world's fastest-growing economy tag to China, whose July-September GDP growth came at 6%.</p>.<p><strong>Also Read: </strong><a href="https://www.deccanherald.com/business/business-news/pm-scrambles-to-spur-growth-india-braces-for-gdp-shock-780880.html">PM scrambles to spur growth; India braces for GDP shock</a></p>.<p>A steep decline in eight key infrastructure sectors, including electricity, steel, cement, crude oil, and coal for two consecutive months, pointed to a slower recovery even in the upcoming quarter of October-December 2019-20. Contraction in the core sector implies industries no longer demand inputs as production has been muted.</p>.<p>The nominal GDP growth, which does not strip out inflation, came at 6.1% in the July-September quarter, the lowest since 2003. The nominal GDP grew at 8% in the first quarter.</p>.<p>With the economic growth falling to this extent, the Reserve Bank of India, is expected to one more key interest rate in its December 5 monetary policy, overlooking the 4.6% consumer inflation number in October, which is higher than its target range.</p>.<p>But the Chief Economic Advisor to the government, K Subramanian and Secretary, Economic Affairs Atanu Chakraborty said the fundamentals of the economy was still strong and that the growth could pick up in December quarter.</p>.<p>The data, however, did not reflect on strong fundamentals. The manufacturing sector, which contributes over 17% to GDP, contracted at 1% in the quarter under review from a 0.6% growth in April-June period. The Modi government aims at increasing manufacturing sector's contribution to GDP at 25% by 2022.</p>.<p>The gross fixed capital formation, a barometer of investment in the economy, contracted 0.9% from a 11.8% growth in the same period a year ago.</p>.<p>“The economy is not out of the woods yet. The overall story is not very good. Goal of $5 trillion economy seems to be slipping by at least one year,” former finance secretary S C Garg, who took voluntary retirement after being shifted to power ministry from the finance post the Union Budget in July, said.</p>.<p>According to Sameer Narang, a Bank of Baroda economist, state government's spendings and defence expenditure helped the GDP stay at 4.5%.</p>
<p>India's economic growth fell further to 4.5% in the July-September period from 5% in January-March dragged down by an almost stalled manufacturing growth, weak private investment and weaker consumption.</p>.<p>But the government spends grew at a handsome 15%, contributing majorly to the headline gross domestic product (GDP) number, which otherwise would have looked much weaker.</p>.<p>With the current decline, India also lost the world's fastest-growing economy tag to China, whose July-September GDP growth came at 6%.</p>.<p><strong>Also Read: </strong><a href="https://www.deccanherald.com/business/business-news/pm-scrambles-to-spur-growth-india-braces-for-gdp-shock-780880.html">PM scrambles to spur growth; India braces for GDP shock</a></p>.<p>A steep decline in eight key infrastructure sectors, including electricity, steel, cement, crude oil, and coal for two consecutive months, pointed to a slower recovery even in the upcoming quarter of October-December 2019-20. Contraction in the core sector implies industries no longer demand inputs as production has been muted.</p>.<p>The nominal GDP growth, which does not strip out inflation, came at 6.1% in the July-September quarter, the lowest since 2003. The nominal GDP grew at 8% in the first quarter.</p>.<p>With the economic growth falling to this extent, the Reserve Bank of India, is expected to one more key interest rate in its December 5 monetary policy, overlooking the 4.6% consumer inflation number in October, which is higher than its target range.</p>.<p>But the Chief Economic Advisor to the government, K Subramanian and Secretary, Economic Affairs Atanu Chakraborty said the fundamentals of the economy was still strong and that the growth could pick up in December quarter.</p>.<p>The data, however, did not reflect on strong fundamentals. The manufacturing sector, which contributes over 17% to GDP, contracted at 1% in the quarter under review from a 0.6% growth in April-June period. The Modi government aims at increasing manufacturing sector's contribution to GDP at 25% by 2022.</p>.<p>The gross fixed capital formation, a barometer of investment in the economy, contracted 0.9% from a 11.8% growth in the same period a year ago.</p>.<p>“The economy is not out of the woods yet. The overall story is not very good. Goal of $5 trillion economy seems to be slipping by at least one year,” former finance secretary S C Garg, who took voluntary retirement after being shifted to power ministry from the finance post the Union Budget in July, said.</p>.<p>According to Sameer Narang, a Bank of Baroda economist, state government's spendings and defence expenditure helped the GDP stay at 4.5%.</p>
