Giving a setback to the government’s ambition of making the Indian economy US 5 trillion by 2024-25, advance forecast released by the National Statistical Office (NSO) indicates that the economy is projected to grow five per cent in the current year 2019-20.
It is the slowest growth rate in the GDP since 2008-09, which was the year of the global financial crisis. The GDP growth rate in 2018-19 was 6.8 per cent and 7.2 per cent during the year before, viz. 2017-18.
Several factors have contributed to the lackluster economy in the current year, of which the biggest remains slowing down of consumption with its domino effect on demand for goods and service.
As per the advance forecast of the NSO private consumption, which is the prime driver of the economy with about 60 per cent share, is likely to grow at 5.8 per cent on the ongoing fiscal, down from 10 per cent in the previous year. The gross fixed capital formation, a measure of investments, is estimated to increase less than one per cent in 2019-20, a collapse from near 10 per cent increase in the previous year. Manufacturing growth is estimated at two per cent which is a 15-year low, as against 6.9 per cent growth in 2019-20. Construction growth is seen slipping to a six year low of 3.2 per cent from 8.7 per cent in the previous year.
Meanwhile in Goa the opinion is that the situation is no better. According to the GCCI, the state although small cannot be isolated from the rest of the economy. “Local industry except for the pharmaceutical sector is feeling the pinch of the slowdown,” says GCCI.
Lalit Saraswat, chairman, CII- Goa, says that in the absence of a systematic effort by local industry to estimate the state GDP it is difficult to predict the trajectory of the economy. “There is a slowdown in Goa,” he says adding that, the slowing down is certain to have an impact on the economy numbers in the current year. .
Saraswat explains that tourism is hit during the ongoing season and the setback is reflected in lesser international tourist footfalls. On the other hand, he reflects that, certain industries that are knowledge based are doing good in the current year. “The slowdown of the Indian economy is going to be a short-term issue,” says the CII chairman optimistically.
The state government during the budget 2019-19 estimated the state GDP at Rs 84,888.9 crore.
According to the Economic Survey, the gross state domestic Product (GSDP) of Goa showed a 12.14 percent growth during 2017-18 when compared to the previous fiscal. The report stated that the GSDP, at current prices for the year 2017-18 was estimated at Rs 70,267 crore as against Rs 62,660 crore in the year 2016-17, thereby registering a growth of 12.14 percent.
The Survey says, that the primary sector accounts for 9.95 percent, secondary sector 53.23 percent and tertiary sector 36.82 percent. It notes that the contribution of primary sector witnessed a decline from 9.86 percent in 2013-14 to 7.72 percent in 2015-16 and thereafter registered an upward trend of 9.95 percent in 2017-18.
Mining is a major industry in the state and with its closure the impact is across sectors in Goa. Mining shutdown is adversely affected the local shipping industry, the real estate sector, income to the state treasury and host of downstream industry. The state’s only port the Mormugao Port Trust (MPT), Vasco, is also taken a huge hit in business.
To revive the Indian economy the finance minister, Nirmala Sithraman is initiated several measures including a sharp cut in corporate tax rate, support for stalled housing projects and Rs 102 lakh crore plan for infrastructure. More boosters are expected in Union Budget 2020-21.
In Goa, however local industry is calling for single window clearance for projects, quick construction of the IT Hub and the electronic city in Tuem. The state needs to complete projects that have been announced over the years, is the opinion of local industry.
Meanwhile all eyes are on the state budget in February 2020.