GVA, manufacturing in free fall for six quarters

New Delhi: The Gross Value Added (GVA) growth numbers for the economy paints a grim picture with a free fall from Q1 of 2018-19 when it was 7.7 percent to the current number of 4.3 percent in Q2 of 2019-20.

The precipitous fall in GVA growth rates is alarming for the economy as a whole and the manufacturing sector in particular.

According to quarterly estimates of Gross Value Added (GVA) for the second quarter (July-September), Q2 of 2019-20 registered a growth of 4.3 percent compared to 6.9 percent in the Q2 of 2018-19, the corresponding period last year. This marks a steep drop in growth rates within a one year period.

Since Q1 of 2018-19, when the GVA was at 7.7 percent, the GVA has been falling every quarter since then.

It dropped to 6.9 percent in Q2, 6.3 percent in Q3 and 5.7 percent in Q4. In the current financial year, 2019-20, it came down further to 4.9 percent in Q1 and the latest reading released on Friday is 4.3 percent.

Within the overall GVA pie, the big crash has come in the manufacturing sector. It has contracted by 1 percent as compared to the strong growth of 12.1 percent in Q1 of 2018-19. This is a very disturbing trend for manufacturing to crash from 12 percent-plus rates to a negative growth of 1 percent within six quarters. The chart mirrors the trend of overall GVA in coming down every quarter from Q1 of 2018-19. From 12.1 percent in that quarter, it came down to 6.9 percent in Q2, 6.4 percent in Q3 and then a massive crash in Q4 to 3.1 percent. In the current financial year, it has been in free fall and from 3.1 percent in Q4 fell heavily to 0.6 percent and for the current quarter has contracted by 1 percent to end in negative territory. (IANS)

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