RBI's downgrading of FY20 growth means the $5 trillion GDP goal may have to wait longer
The Reserve Bank of India has once again downgraded the growth forecast to 5 per cent in its fifth bi-monthly policy from 6.1 per cent two months ago. It has revised the growth to 4.9-5.5 per cent in H2 and 5.9-6.3 per cent for H1 2020-21.
印度央行在其第五次双月政策会中，再次将经济增长预期从两个月前的6.1%下调至5%。该机构将第二季度的经济增长率修正为4.9- 5.5%，并将第一季度的增长率修正为5.9- 6.3%。
While improved monetary transmission and a quick resolution of global trade tensions are possible upsides to growth projections, a delay in revival of domestic demand, a further slowdown in global economic activity and geo-po itical tensions are downside risks.
The third revision of the full year economic growth estimate by the RBI comes in the backdrop of the second quarter GDP growth falling to 4.5 per cent from 5 per cent in the first quarter.
Second quarter GVA was reported at 4.3 per cent.
Experts feel that there will be a pick up in the coming quarters on the back of steps taken by the go nment in the form of infrastructural boost, corporate tax cut, liberalising FDI, ensuring flow of credit to non-banks and more capital infusion. However, the ultimate outcome is yet to be achieved in terms of real time growth.
A 12 percent nominal growth was required to achieve the $5 trillion economy by 2024-25. However, with economy growing at 6.1 per cent which is almost as half the estimation, it has become more challenging to accomplish the set target.
Almost all lead indicators for the second quarter painted a picture of gloom. The index of industrial production showed contraction in the months of August and September, led by contraction in the manufacturing and capital goods sector.
The investment rate in the economy measured by Gross Fixed Capital Formation (GFCF) col psed to just 1 per cent in the second quarter from 11.8 per cent in the same period last year.
The go nment has undertaken a number of measures to revive investments. In September, it announced a cut in the corporate tax rate to 22 per cent from 30 per cent. It also lowered the tax rate for new manufacturing companies to 15 per cent to attract new foreign direct investments.
Revisions in the growth forecast for FY20 by various rating agencies:-
Rating agency Crisil sharply cut its growth forecast for the current financial year to 5.1 per cent from an earlier estimate of 6.3 per cent.
The current fiscal year forecasts by Nomura has massively cut its GDP forecast to a low 4.9 per cent for the year from 5.7 per cent earlier, saying the economy is going through a "deeper trough" and even a sub-par recovery is at least a year away.
"India Ratings and Research has revised its GDP growth forecast for FY20 to 5.6 per cent. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1 per cent," the rating agency said in a statement.
译文来源：三泰虎 http://www.santaihu.com/48930.html 译者：Joyceliu
In 2014 he promised Acche Din which of course never came , in 2019 - 5 trillion $ economy .....enjoy the hoodwinking
Looks like RBI too are clueless and only slowly downgrading the GDP forecast. Truth is that this BJP gt has fudged data so much, now nobody has authentic data. The idiots Modi and Shah from BJP are only taking India backward.
Push it to 2029.
I am confident that Jhumla Raja will take us to 5 trillion economy by next year - only 5 trillion INR, not USD.
Why is it difficult for anyone to understand that no one is willing to invest in India where there is no Law and Order and Judiciary is impent and sold out to ruling . Modi has neither any talented economist nor financier who can tell him what to do. Planning commission was abolished as it was Nehru'd but M\Niti Ayoug has produced nothing.Modi did not pay any attention to Economy but just empty talk adn was busy to control parliament and thus can pass any bill on voi e and need not worry about any opposition. Vers blindly ved and now the question is : ARE WE BETTER OFF THEN WHEN MODI TOOK OVER OVERALL?World has no respect for India and that is why Make in India failed.
There was intense exchange of views about Onion Crisis. We should use simple logic. A Company manufactures products and sells products. Each and every stage of production has certain portion of costs involved. This is the case of Manufactured products. What about Fresh Produce. It is produced by farmers (it involves several stages in case of manufacturing). Farmers toil a lot and give Onion or other commodity. In case of Onion may be Rs. 2 or Rs. 3/-. From Farmers to Consumers, what value addition takes place? Nothing. Price to Farmer Rs. 2 to Rs. 3 or Rs.5. The Onion is sold in Mumbai at Rs.150. Who is eating away Rs.145/-. In case of Manufacturer, it is called Profiteering and several Companies were punished.Nobody is PUNISHING TRADERS- WHOLESALE/RETAILER. IN EACH EVERY STAGE, POLITICIAN IS INVOLVED. SOME POLITICIAN COLLECT "AFTA" FROM RETAIL TRADERS. THERE IS HUGE PROFITEERING ON NOT JUST ONIONS BUT ALL VEGETABLES / FRUITS.
$5 trillion economy is day dreaming of current gt. It shouldnot happen that economy slide to $0.5 trillion.
All experts failed to manage onion price .Its impossible to achieve 5trillion $ economy with this team.
$ 5 trillion economy was an agenda of Modi ji, and that is good on lips. The real economy was lum at the time of this thum in public. Modi completely entrusted the reins of finance to a person who doesn't have worldview neither a pragmatist. It is obvious, such decision making with bunch of babus have taken the economy to a slope where braking means tumbling down faster.So dreaming $5 trillion should be kept for another day.
The way things are going $5t looks like a target for 2029 instead of 2024.
I believe one of the main reasons behind slowdown is uncertainty, this is causing hindrances in new investments, small or large.
It was just a jumla for ions now wait for a new one next time.
Truth Is Bitter
When Onion price reaches Rs 1000/-
Truth Is Bitter
5 Trillion ONIONS ???
Wait ? Right . But for how long is the question .
who says current gdp is 5% ...no industry is growing at 5% currently...in fact most are seeing degrowth..wonder from where this 5 trillion dollar figure is coming from
India will reach 5 trillion mark someday, but not in present re gie. Feku can promise anything without analyzing data.
This gt has lost its credibility. People at the helm are the biggest liers.
Benoy Kumar Kumar
RBI is Frauder no 1 ,their Offi al Frauded me Rs.1,34,700 for transferred of my Fund which is under Custody of RBI.But they have not transferred of my Fund. They have digested my Rs.1,34,700. Matter has been reported to Governor RBI cepcbelapur and cepcnewdelhi no action has been taken still to day.
Gross Bollywood Product
We're fast approaching recession. (We might actually be in one now). BJP sarkar has proved that it cannot manage the country's affairs, except for handling masjid-mandir issue, triple tq issue. It has failed miserably on every other front.
Well, at the current growth rate of 5%, it will take 15 years for the economy to grow to $ 5 trillion. Of course, there is no harm in dreaming about it in the meantime!
Till recently our NDA was boasting of jobless growth of6.5 %, not realizing that people were buying by withdrawing from their hard earned savings.Even today tax collected from middleclass is not used for infrasteuc development which would create jobs,instead it'sexcessively being used on welfare schemes.
BLACK ECONOMY IS DEFINITELY SLOWING. REAL ESTATE IS CONFIRMING THAT.SOME PEOPLE ARE GREATLY UPSET AS THEY ARE HIGHLY DEPENDENT ON BLACK ECONOMY.WHITE ECONOMY IS DOING FINE AND STOCK MARKET IS SHOWING THAT AND GOOD FOR COMMPON MAN AND THE COUNTRY.
Shaleen Nath Tripathi
INDIA has grown more than 200% in the last 7 yrs in GDP at constant price terms after 2012... In 5yrs economy will more than double to $5 trillion...
So this is the excuse for not reaching GDP of US$5T ? This is certain that one day India will achieve US$5T irrespective of re gie !
Shaleen Nath Tripathi
It doesn't matter that the Gt or RBI provide stimuli... The market forces of demand/supply or scale and prices are on autocorrect... Suppose real interest rates are high and investment is not increasing supply could go down and increase inflation which would cut the real interest rate...
P N N
Pipe dream about 5tn economy need efficient go nment not hallow /-false promise go nment.
What is the use of "forecasting" if you reduce your so called "forecast" every quarter?!