Editor's Pick: GDP growth dips as manufacturing slides

Manufacturing and mining output contracted year-on-year in the July-September quarter, dragging Gross Value Added growth to a slower-than-expected 5.6%, which together with high inflation and weak exports combined to slow overall Gross Domestic Product (GDP) growth to a 6.3% pace, as per estimates released by the National Statistical Office. At a little over ₹75 lakh crore, India’s GDP in the first half of 2022-23 was 5.7% larger than the comparable pre-COVID level. The April to June quarter of this fiscal had witnessed GDP growth of 13.5%, with GVA expanding 12.7%. While growth in agriculture GVA quickened to 4.6% in the second quarter, manufacturing and mining GVA contracted 4.3% and 2.8%, respectively, in Q2 compared with a year earlier. Among GVA components, the sharpest growth in Q2 was reported by the contact-intensive trade, hotels, transport, communication and services related to broadcasting segment. Bank of Baroda chief economist Madan Sabnavis termed the manufacturing sector’s negative growth ‘a disappointment’ and attributed it to low growth at small and medium enterprises and a drop in profits for the organised sector. Chief Economic Advisor V. Anantha Nageswaran, however, said the data confirm that the economy’s recovery from the pandemic continues and is on track to clock between 6.8% to 7% real GDP growth this year. “India’s growth rates in real terms of 9.7% in the first half of this year is well above the trend in other countries and is happening amid tightening global financial conditions and the commodity price shock since the Ukraine invasion by Russia,” the CEA emphasised, adding that moderation in growth rates is expected due to base effects. Former Finance Minister P. Chidambaram, meanwhile, claimed that the government is living in denial about the internal factors responsible for the economic downslide in the context of the latest GDP numbers. He added that the climate for investment was vitiated. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. Click here. The Hindu’s Editorials Unseemly conflict: On Supreme Court-government tussle over the Collegium system Cease and desist: On the Bengaluru voter data theft The Hindu’s Daily News Quiz Which foreign airlines is obtaining a 25.1% stake in Air India? Cathay Pacific AirAsia Etihad Singapore Airlines To know the answer and to play the full quiz, click here. [logo] Editor's Pick 01 DECEMBER 2022 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( Dear reader, We have now made it easier for you to manage your The Hindu newsletter subscriptions in one place! 1. Visit [The Hindu newsletters page]( 2. Click MANAGE tab and then click LOGIN / SIGN UP 3. If you don’t have an account with The Hindu, please click SIGN UP OR If you already have an account with The Hindu with this email ID, please login using the email ID GDP growth dips as manufacturing slides Manufacturing and mining output contracted year-on-year in the July-September quarter, dragging Gross Value Added growth to a slower-than-expected 5.6%, which together with high inflation and weak exports combined to [slow overall Gross Domestic Product (GDP) growth to a 6.3% pace]( as per estimates released by the National Statistical Office. At a little over ₹75 lakh crore, India’s GDP in the first half of 2022-23 was 5.7% larger than the comparable pre-COVID level. The April to June quarter of this fiscal had [witnessed GDP growth of 13.5%]( with GVA expanding 12.7%. While growth in agriculture GVA quickened to 4.6% in the second quarter, manufacturing and mining GVA contracted 4.3% and 2.8%, respectively, in Q2 compared with a year earlier. Among GVA components, the sharpest growth in Q2 was reported by the contact-intensive trade, hotels, transport, communication and services related to broadcasting segment. Bank of Baroda chief economist Madan Sabnavis termed the manufacturing sector’s negative growth ‘a disappointment’ and attributed it to low growth at small and medium enterprises and a drop in profits for the organised sector. Chief Economic Advisor V. Anantha Nageswaran, however, said the data confirm that the [economy’s recovery from the pandemic continues and is on track]( to clock between 6.8% to 7% real GDP growth this year. “India’s growth rates in real terms of 9.7% in the first half of this year is well above the trend in other countries and is happening amid tightening global financial conditions and the commodity price shock since the Ukraine invasion by Russia,” the CEA emphasised, adding that moderation in growth rates is expected due to base effects. Former Finance Minister P. Chidambaram, meanwhile, claimed that [the government is living in denial]( about the internal factors responsible for the economic downslide in the context of the latest GDP numbers. He added that the climate for investment was vitiated. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. 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