Ahead of Prime Minister Narendra Modi government's maiden Budget in the second term, an economic survey has predicted the GDP at 7% for the financial year 2019-20
New Delhi: The Central government on Thursday (July 4) projected the country's GDP growth for 2019-20 at 7%, up from a five-year low of 6.8%, on the back of anticipated pickup in investment and consumption.
According to the Economic Survey 2018-19, tabled by finance minister Nirmala Sitharaman in Parliament, India continues to remain the fastest-growing major economy in the world in 2018-19, despite a slight moderation in its gross domestic product (GDP) growth from 7.2% in 2017-18 to 6.8% in 2018-19.
"India's growth of real GDP has been high with average growth of 7.5% in the last five years (2014-15 onwards). The economy grew at 6.8% in 2018-19, thereby experiencing some moderation in growth when compared to the previous year," it said.
This moderation in growth momentum is mainly on account of lower growth in agriculture, trade, transport, communication and services related to broadcasting among others, it said.
During the last five years, India's economy has performed well, it said, adding that the government has ensured that the benefits of growth and macroeconomic stability reach the bottom of the pyramid by opening up several pathways for trickle-down.
"To achieve the objective of becoming a $ 5-trillion economy by 2024-25, as laid down by the Prime Minister, India needs to sustain a real GDP growth rate of 8%," it said.
As per the survey, GDP growth for the year 2019-20 is projected at 7%, reflecting a recovery in the economy after a deceleration in the growth momentum throughout 2018-19.
"The growth in the economy is expected to pick up in 2019-20 as macroeconomic conditions continue to be stable while structural reforms initiated in the previous few years are continuing on course. However, both downside risks and upside prospects persist in 2019-20," it said.
The survey, meanwhile, retained the fiscal deficit at 3.4% of GDP for the current fiscal, the same as projected in the revised estimate of the interim Budget 2019-20.
However, general fiscal deficit — Centre and states combined — has been pegged at 5.8% in 2018-19, down from 6.4% in the previous fiscal.
The current account deficit (CAD) in the economy increased from 1.9% of GDP in 2017-18 to 2.6% in April-December 2018.
"The widening of the CAD was largely on account of a higher trade deficit driven by rise in international crude oil prices (Indian basket). The trade deficit increased from $ 162.1 billion in 2017-18 to $ 184 billion 2018-19," it said.
Last Updated 2:46 PM IST