Economic growth would get a boost of a whopping 0.7 percentage points in the current fiscal year as the government revised downwards its gross domestic product (GDP) expansion sharply from 6.8 per cent to 6.1 per cent for 2018-19.
According to advance estimates, the economy is projected to grow by five per cent in the current fiscal year, which would be an 11-year low. After the growth was revised for the previous year, this growth would now be 5.7 per cent, which would be a seven-year low.
Aditi Nayar, principal economist at ICRA, said the economy would also get a boost from agriculture in the current fiscal year as the growth in the sector is likely to be higher than projected in the advance estimates. She attributed this to the better-than-expected sowing for rabi crops. Rabi acreage rose by 9.5 per cent till Friday this season over the same period of the previous year.
Advance estimates pegged agriculture and allied sector growth at 2.8 per cent. GDP at current prices would also get a bit of a notional fillip as the growth under this head would now be 7.75 per cent for the current fiscal year against 7.5 per cent calculated earlier.
However, the government will not get any cushion for the Budget, which would be presented on Saturday as GDP in absolute numbers did not see any change for 2019-20.
As such, the government may not get any lever to manage various ratios such as fiscal deficit from these numbers. For 2018-19, agriculture and allied sector growth was revised down to 2.4 per cent from the earlier calculated 2.9 per cent.
Manufacturing was revised to 5.7 per cent from 6.9 per cent and construction to 6.1 per cent from 8.7 per cent. However, trade, hotels and related sector growth saw a rise from 6.9 per cent to 8.5 per cent.
Besides 2018-19, GDP growth for 2017-18 was changed to seven per cent from 7.2 per cent.