The precipitous fall in GVA growth rates is alarming for the economy as a whole and the manufacturing sector in particular.
According to quarterly estimates of Gross Value Added (GVA) for the second quarter (July-September), Q2 of 2019-20 registered a growth of 4.3 per cent compared to 6.9 per cent in the Q2 of 2018-19, the corresponding period last year. This marks a steep drop in growth rates within a one year period.
Since Q1 of 2018-19, when the GVA was at 7.7 per cent, the GVA has been falling every quarter since then.
It dropped to 6.9 per cent in Q2, 6.3 per cent in Q3 and 5.7 per cent in Q4. In the current financial year year, 2019-20, it came down further to 4.9 per cent in Q1 and the latest reading released on Friday is 4.3 per cent.
Within the overall GVA pie, the big crash has come in the manufacturing sector. It has contracted by 1 per cent as compared to a strong growth of 12.1 per cent in Q1 of 2018-19. This is a very disturbing trend for manufacturing to crash from 12 per cent plus rates to a negative growth of 1 per cent within six quarters.
The chart mirrors the trend of overall GVA in coming down every quarter from Q1 of 2018-19. From 12.1 per cent in that quarter, it came down to 6.9 per cent in Q2, 6.4 per cent in Q3 and then a massive crash in Q4 to 3.1 per cent.
In the current financial year, it has been in free fall and from 3.1 per cent in Q4 fell heavily to 0.6 per cent and for the current quarter has contracted by 1 per cent to end in negative territory.
( With inputs from IANS )