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A day after Union minister Piyush Goyal told people not to depend on maths and raise doubts about India’s economic growth, reports came of the International Monetary Fund (IMF) saying India’s economic growth is “much weaker” than expected.

The IMF attributed this to corporate and environmental regulatory uncertainty and lingering weaknesses in some non-bank financial companies.

In July, the IMF projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3 per cent for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2 per cent reflecting a weaker-than-expected outlook for domestic demand.

However, it said India will still be the fastest-growing major economy of the world and much ahead of China.

Addressing a press conference yesterday – Thursday, Sep 12 – IMF spokesperson Gerry Rice said, “There was a question on India and its growth rate… and I want to take it… we will have a fresh set of numbers coming up, but the recent economic growth in India is much weaker than expected.”

He added that it was “mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-bank financial companies and risks to the outlook are tilted to the downside, as we like to say.”

“We will have a fresh set of numbers coming up but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-bank financial companies,” IMF spokesman Gerry Rice told reporters at a news conference here on Thursday.

The risks to the outlook are tilted to the downside, he added.

Responding to a question on the recent GDP figures of India, Rice said the IMF will monitor the economic situation in India. “We will update that assessment in the upcoming world economic outlook,” he said.

As per the government data, weak manufacturing and consumption numbers dragged the country’s GDP growth to a six-year low of 5 per cent in the first quarter (April-June) of the current fiscal. The GDP growth rate has now slowed for the fifth consecutive quarter with the previous low recorded at 4.3 per cent in March 2013.

Growth in eight core sectors – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – dropped to 2.1% in July, compared to 7.3% growth in the same period last year, according to media reports citing commerce ministry figures.

Former prime minister Manmohan Singh Thursday criticised the Centre’s aim to make India a $5-trillion economy by 2024, calling it a “pipe dream”. Addressing a meeting of top Congress leaders, he said, “The dangerous thing about the present situation is that the government is complacent enough not to realise that we are in the midst of a protracted economic slowdown.”

The IMF has cut its projection for India’s economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the “weaker-than-expected outlook” for the domestic demand. The growth is expected to rise to 7.2 per cent points in FY21, down by the projected growth rate of 7.5 in the earlier report.

The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, said the Ministry of Statistics and Programme Implementation in a statement.

The previous low was recorded at 4.9 per cent in April to June 2012-13. Consumer demand and private investment have weakened amid global trade frictions and dampening business sentiment.

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