Due to low consumption, weak investments and an under-performing service sector, a Nomura report says that India’s economic growth is likely to slow down further to 5.7 per cent in the April-June quarter of this year. “The Indian economy is likely to slow down further to 5.7 per cent in April-June from a five-year low of 5.8 per cent in January-March,” Nomura analysts Sonal Varma and Aurodeep Nandi said in their client note.
Reserve Bank of India Governor Shaktikanta Das also said, “The Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth.” The stench of slowdown wafting down markets is such that the economy is gripped by angst and anxiety. Quarterly data on sales, across segments, are sliding in unison – from passenger cars to packaging material. And when innerwear sales slide you know the sheen of the economy has worn off. The persistence of bad loans on the books of banks and the near-collapse of the shadow banks is a loud May Day call.
Former RBI Governor, Raghuram Rajan in an interview said “There are a variety of growth projections from the private sector analysts, many of which are perhaps significantly below government projections and I think certainly the slowdown in the economy is something that is very worrisome.”
In year 2018-19, the growth rate was merely 6.8% which is slowest since 2014-15.
The private experts as well as the RBI projection says that the Growth Rate for this year will remain lower than Government estimate of 7%. The automobile and ancillary industry, real estate sector has huge unsold inventory, while fast-moving consumer goods (FMCG) companies have reported a decline in volume growth leading to thousands of job loss.