GDP growth down largely on low growth in manufacturing, construction: Govt

NEW DELHI: The growth of India’s gross domestic product (GDP) has declined largely due to low growth in manufacturing and construction, government has informed Parliament.

“The growth of GDP has declined largely due to low growth in manufacturing and construction sector,” minister of state (independent charge) for statistics and programme implementation Rao Inderjit Singh said in a written reply to a question in Lok Sabha.

The National Statistics Office has forecast India’s GDP growth to slip to an 11-year low of 5% in FY20. Manufacturing growth in 2019-20 is seen at 2% year on year, which is a 15-year low, as against 6.9% growth in FY19. Construction growth is seen slipping to a six-year low of 3.2% in FY20 from 8.7% in the last fiscal.


Citing the examples of introduction of Insolvency and Bankruptcy Code (IBC) in 2016, Goods and Services Tax for improving ease of doing business and Make-in-India to increase indigenous capacity, Singh said that the government has been undertaking various measures to boost GDP growth.

Survey non-acceptance
In a separate reply to a question on the government not accepting the findings of various surveys, he said in case of Enterprise Survey on Services Sector (July, 2016 – June, 2017)), it was observed that there were issues in the survey methodology which would not have led to meaningful results and thus only a technical report was brought out.

In case of Household Consumer Expenditure Survey, as part of NSS 75th round (July 2017-June 2018), the minister said the results were examined and it was observed that there was a significant variation in the levels in the consumption pattern and the direction of the change while comparing with other administrative data sources and its inability to effectively capture the levels of subsidy of goods and services consumed.

“Thus the survey results could not have been used for the base revision for the macro-economic indicators like Gross Domestic Product (GDP), Index of Industrial Production (IIP), Consumer Price Index (CPI) and Wholesale Price Index (WPI) and would have led to inaccuracies in the estimates and thus, the report was not released,” Singh said.

As per the minister, in case of Periodic Labour Force Survey 2017-18, it was observed that the sampling design had changed and led to incomparability with earlier surveys on Employment and Unemployment and this was included in the report released which is also available in the public domain.

His reply assumes significance in the wake of the credibility of India’s official data coming under strain following the leak of the draft Household Consumer Expenditure report, which showed a decline in spending in rural India in FY18 and was later shelved.

Last year, the government had withheld the Periodic Labour Force Survey report that showed unemployment sharply rising to a high of 6.1% in FY18 compared with 2.2% in FY12 following which NITI Aayog stepped in for a cover-up. Issues were also raised about GDP data based on the new series with economists citing quality issues.