India’s real or inflation-adjusted gross domestic product (GDP) grew at 5% in the June 2019 quarter of financial year 2019-20 (Q1FY20), the slowest growth in six years. In nominal terms, the growth stood at just 7.99%, the lowest since December 2002. (Refer to Table I for details on India’s GDP Growth). The question raised here was, what were the indicators which confirmed that the Indian economy was facing a slowdown?..

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IMPACT OF THE MEASURES

Although the Indian government and the RBI had introduced various measures in response to the slowdown, they had little to no effect. Speaking at the Hindustan Times Leadership Summit in December 2019 about the impact of the measures taken, Nirmala stated: “While some sectors have gained from key 32 measures taken by the government, some other sectors still need some help.” Nirmala noted that the PSBs had disbursed close to ₹500 billion in October-November 2019 to non-bank lenders and small and large businesses, among others, ensuring that money was reaching the people directly for consumption...

FUTURE OUTLOOK

Although the government and the RBI had implemented measures to revive the Indian economy, economic growth was expected to tumble even further below the 5% reported in the first quarter of the fiscal year 2019-2020. Taking into consideration the depressing state of the macroeconomic indicators for the second quarter, especially the months of August and September 2019, various rating agencies and financial institutions had further downgraded the second-quarter growth figures ranging from 4.2% to 4.7 percent...

EXHIBITS

Exhibit I: India’s Consumer Confidence – Net Balance 2011- 2019
Exhibit II: Saving and Capital Formation by Institutions
Exhibit III: Exports of Goods and Services (% of GDP) – India
Exhibit IV: Unemployment, Total (% of Total Labor Force) (Modeled International Labour Organization Estimate) - India