News:The National Statistical Office (NSO) has released the First Advance Estimates for the financial year 2019-20.
Key takeaways from the estimates:
- The Indian economy is estimated to grow at 5% in 2019-20 as against 6.8% in the previous fiscal.
- This projected growth rate of gross domestic product(GDP) is the lowest in the last 11 years i.e since financial year 2009.
- The nominal GDP which is the market value of goods and services produced in the economy but not adjusted for inflation is estimated to grow at 7.5% which will be the lowest since last 42 years.
- The slowdown is due to growth being dragged down by anaemic manufacturing, slowing services sector growth as well as sluggish investment and consumption.
- Further,the exports is also estimated to contract by 2% during FY20 as against 12.5% growth recorded a year ago.This can be attributed to weak global trade activity led by the tariff war between US and China.
What are the steps taken by government to overcome slowdown?
- It has announced a cut in the corporate tax rate to 22% from 30%.It also lowered the tax rate for new manufacturing companies to 15% to attract new foreign direct investments.
- It has also taken other initiatives such as bank recapitalization, mergers of 10 public sector banks into four, support for the auto sector, plans for infrastructure spending as well as tax benefits for startups.
- The government has also constituted a task force to draw up a National Infrastructure Pipeline(NIP) from 2019-20 to 2024-25.It will prepare a roadmap that India would need to spend $4.5 trillion on infrastructure by 2030 to sustain its growth rate.