India Loses to China, No more Fastest Growing Economy.

India has lost its spot as the fastest growing major economy to China.Gross Domestic Product (GDP) growth of India falls to 5.8 % in January-March quarter as official data released on May 31 showed. Meanwhile, India's unemployment rose to 6.1% in 2017/18 fiscal year, according to data released by the statistics ministry. 

• What's the story?

India has lost its top spot as the fastest growing major economy of the world.GDP growth of India stood at 5.8 % in January-March quarter according to the official data released. With this, India’s economic growth rate for full fiscal 2018-19 was also revised downwards to 6.8% from the 7% estimated earlier. Notably, an economic outlook survey by industry chamber Ficci on Thursday had expected India’s GDP to grow 6.5% in the fourth quarter ended March. This is the slowest GDP growth rate in five years, due to poor performance in agriculture and manufacturing sector.The agriculture sector, which has been hit by falling farm produce prices and flat income growth, stood at -0.1 % in January-March 2019 and 2.9 % overall in the year 2018-19. The manufacturing sector posted a growth of 3.1 % this quarter while the growth is estimated to be 6.9% in financial year 2019 as against previous year's growth rate of 5.9 %. 

Mr Subhash Chandra Garg (finance secretary of India) added that country's growth rate, which has been hit due to weak consumption demand and private investment, will start turning around from the July-September quarter with favourable interest rates and an improvement in liquidity.The Ministry of Statistics revised economic growth for the financial year to March 31, 2019 to 6.8 % from 7.0 % estimated earlier.The slowdown may lead to another rate cut by the central bank in its June policy review, say economists.

• What's next?

With Nirmala Sitharaman stepping in as the finance minister of the newly elected MODI 2.0 government it will be interesting to see how she overcomes these hurdles by plotting down proper government schemes to grow the struggling Agri and manufacturing Industries and encourage Indians to spend more in the domestic consumer market.Let us know in the comment section if you think Indian GDP growth rate will bounce back to the top spot again.