JP Morgan: India's lowest growth in 5 years, 5.8%, worrying; recovery may be slow

Commenting on India’s January-March 2019 GDP growth, which "surprised sharply to the downside, printing at a 5-year low of 5.8%", JP Morgan, the American multinational investment bank and financial services company headquartered in New York City, has said that it has not just "dragged down full-year growth also to a five-year low of 6.8%".

It underlines, "The GDP undershoot reinforces the discernable slowdown that is currently underway. Growth has largely been flying on one engine in recent years – private consumption – and that has gotten progressively exhausted."
Worse, in its commentary, authored by Sajjid Z Chinoy and Toshi Jain, who are with the top MNC's Emerging Markets Asia Economic and Policy Research wing, say, even this is "buffeted by sustained rural distress and a significant tightening of financial conditions amongst the Non Bank Financial Companies (NBFC), which have largely been financing consumption."

Continue the JP Morgan experts, as for public investment, it suffers from "lack of fiscal space with the total public sector borrowing requirement rising to almost 9% of GDP", and while exports bounced back strongly in 2018-19, they "are likely to slow meaningfully as global uncertainty rises (especially after the US has opened up a second flank in its trade war) and global growth momentum slows."

Giving figures on how Gross Value Added in agriculture and industry have been going down over the last one year, JP Morgan predicts, "Slowing consumption growth at home along with a cloudy outlook for exports, creates the worrying prospect of some hysteresis and suggests growth is likely to recover only slowly in the coming quarters."

Comments

Jay Somnath

Kanhaiyalal Maneklal Munshi This is what happened several decades ago, when I was a small school-going child. Every summer, accompanied with my mother, I would come down from Delhi to spend the two-month-long holiday at my maternal uncle’s place in the posh Panchvati area of Ahmedabad. Each weekend, my uncle would take us for a ride in his grand old black car. I think it was Chevrolet. I would wait eagerly for the weekend, as I had virtually nothing to do for the rest of the days. In the evenings, I mostly play in the open ground with the neighbouring children, but for rest of the time, as if, I was under strict, almost loving, control of my grandma, whom all of the children of the family called Baa. Especially after the dinner, which would be pretty early, she would make it a point to entertain us – mainly me and my cousin – by playing bezique. During one such summer, Baa decided to give us a strong injection of nationalism. She took in her hand Kanhaiyalal Maneklal Munshi’s well-kno...

'Rethink' Kalpasar, 'end civil engineering mindset' in Gujarat's water strategy

Prof. Vidyut Joshi, a prominent sociologist and one of the leading protagonists of the mega Narmada dam project, has raised critical questions regarding the viability of Gujarat’s ambitious Kalpasar project. Writing in the Gujarati daily Sandesh under the headline "Let us consider alternatives scientifically for the Kalpasar project," Joshi argues that rather than remaining trapped in a "civil engineering mindset" focused solely on constructing massive dams, the state must pivot to modern, sustainable, and technologically viable alternatives to quench the thirst of the arid Saurashtra region.

DigiLocker's 'mismatch' problem: When technology defies government policy

DigiLocker has been functioning in rather strange ways, at least in my experience over the past year. For quite some time now, I have been trying to retrieve various documents from the Government of India's official app, but every attempt ends with an inexplicable "mismatch" error. I even lodged a complaint through its official email ID, explaining that I was unable to retrieve or download essential documents such as my PAN card , driving licence, and the registration certificates of my car and scooter. The response has remained the same: the system refuses access on the grounds of a so-called mismatch.

RajivBuzz

Search This Blog