India Gross Domestic Product (GDP)

Weaker consumer demand lowers India's economic growth to 6.6% YoY.

Published monthly by CSO under the Ministry of Statistics and Programme Implementation. Updated until the October-December 2018 quarter. (Published on February 28, 2019)

Note: The data post-2011 Q2 is in the base year 2011-12. For data, before 2011 Q2 we (IMA) have used yearly growth rates for those quarters, obtained from a series on a different base year. For example, the GDP of 2011 Q2 (on 2011-12 base year) and its year on year growth rate (on 2004-05 base year) gives us the GDP of 2010 Q2 (on 2011-12 base year).

Recent Data Trend

India's Gross Domestic Product (GDP) growth moderated to a six-quarter low of 6.6% year-on-year (YoY) during Oct-Dec'18 (Q4 2018). The growth numbers undershot the market expectations of 6.8% YoY (Bloomberg Poll). The slump in the real GDP growth was on account of lower growth in agriculture, manufacturing and services. A slowdown in both private consumption and the government consumption spending compared to the previous quarter also brought about the decline in the overall growth of the economy.

The GDP growth for 2018-19 has been revised lower to 7% YoY from an earlier estimate of 7.2% YoY by the Central Statistical Office (CSO). This is going to bad news for the government which seeks for a second term in office at the general elections due by May. The government is already under pressure due to declining farm incomes as well as weak job growth.

On the demand side, private consumption and government consumption expenditure have seen a decline during Oct-Dec'18. Private consumption (PFCE) declined significantly to 8.3% YoY from 9.8% YoY in the previous quarter. Farm distress, weak rural incomes and lower urban demand are the main drivers for the decline in consumer demand. The government's consumption was also weaker than before. On the other hand, the investment demand as measured by gross fixed capital formation, grew at 10.6% during Oct-Dec'18 compared to 10.2% in Jul-Sep'18.

The output growth as depicted by the gross value added (GVA) declined to 6.3% YoY from 6.9% YoY growth in the last quarter mainly due to a slow down in manufacturing and agricultural activity. The decline in manufacturing sector growth to 6.7% YoY during Oct-Dec'18 impacted the overall output of the industrial segment. The agricultural sector has seen a decrease in growth rates (2.7% YoY in Q4 2018) can be attributed to uneven rainfall. Growing signs of weakness in the economy is emerging from the rural communities where incomes have been hit with falling farm prices. The focus of the government has shifted towards addressing the rural distress with the increase in Center's spending to make direct cash transfers to farmers.

The slump in GDP growth indicates that the economy is losing steam. Based on the CSO's second revised estimate we can expect the growth in the next quarter to ease further to match the overall projection for the current fiscal (7% YoY for 2018-19). Moreover, the CSO has lowered down the projection for investment growth to 10% YoY from the earlier estimate of 12.2% YoY for 2018-19. With this, we can expect RBI to cut the interest rates in its next policy meet in order to boost growth. An increase in nominal GDP projection to Rs.190 trillion will help the government in meeting its target of 3.4% of GDP in FY19.

Brief Overview

Real GDP or Gross Domestic Product of India at constant (2011-12) prices is computed using expenditure approach to output. Under this approach, the output or GDP is the sum of private final consumption expenditure (PFCE), government output or Government Final Consumption Expenditure (GFCE), capital formation as indicated by Gross Fixed Capital Formation (GFCF) and Net Exports (Exports minus Imports).

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The Central Statistical Office under the Ministry of Statistics and Program Implementation (MOSPI) releases the official estimates of  GDP.  The National Accounts Division (NAD) under CSO is responsible for the preparation of national accounts, which includes Gross Domestic Product, Government and Private Final Consumption Expenditure, Gross Fixed Capital Formation and other macroeconomic aggregates.

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Gross Value Added at Basic Prices (Sector-wise)

Note: Gross Value Added at Basic Prices (2011-12=100) shows the value addition at the industry level. All the components have been included. The Agriculture sector represents the Agriculture, Forestry and Fishing category; the Industry Sector comprises of Manufacturing, Mining Quarrying, Electricity, Gas Water & Other Utilities and Construction. Services Sector comprises of all the service categories.

Non-government GVA is GVA excluding public administration, defence, and other services.

Next Release Date: May 31st, 2019

Per-Capita GDP of India

Note: To calculate real per capita GDP of India we have used the yearly population estimates of CSO and the yearly GDP of India from 2011-12 to 2016-17. For data, before 2011-12 we (IMA) have used growth rates for those years, obtained from a series on a different base year. For example, The GDP of 2011-12 (on 2011-12 base year) and its year on year growth rate (from 2004-05 base year series) gives us the GDP of 2010(on the base of 2011-12). The real per capita GDP is then computed from the rebased data. The GDP deflator, which is the ratio of Real GDP to Nominal GDP is calculated from the extended rebased series of real GDP 2011-12 and nominal GDP.

Nominal GDP-Annual

Note: The years in the graph represent the fiscal year, for instance, the year 2009 represents the period Apr'09-Mar'10. with 2011-12 as the base year for the entire series.  

Real GDP- Annual

Note: The years in the graph represent the fiscal year, for instance, the year 2009 represents the period Apr'09-Mar'10. with 2011-12 as the base year for the entire series.  

National Savings

Note: Data prior to 2011 is on 2004-05 base year methodology. The data 2011 and onwards is on 2011-12 base year methodology. 
Note: The years in the graph represent the fiscal year, for instance, the year 2009 represents the period Apr'09-Mar'10.