LOL, that didn't last long. I wonder what the true rate of growth is. Modi has been caught cooking the numbers. According to the old statistical methods, India is probably growing at 3.8% only. This would explain the lack of job creation.
India no longer world's fastest-growing economy
India's economy has grown at its slowest pace in almost five years, according to the latest data released by the government.
The new numbers are a cause of concern for PM Narendra Modi, who started his second term on Thursday, writes the BBC's Sameer Hashmi.
In the past financial year - April 2018 to March 2019 - the economy grew by 6.8%. And in the quarter between January and March, it expanded by just 5.8% - falling behind China's pace for the first time in nearly two years.
This means India is no longer the world's fastest-growing economy. And it will be a challenge for the new finance minister, Nirmala Sitharaman, only the second woman to hold the post after former PM Indira Gandhi.
Ms Sitharaman has headed important ministries like commerce and defence during Mr Modi's first term. But she takes charge at a time when the economy is faltering.
Where are the jobs?
The immediate concern will be to help restore confidence in the economy.
"It's important to strike a balance between short-term and long-term priorities," economist Dharmakirti Joshi says.
One of the pressing challenges is job creation.
The biggest criticism of Mr Modi during his first term was his government's failure to generate employment. According to a government report, unemployment touched a 45-year high between 2017 and 2018.
Mr Joshi believes the government should focus on labour-intensive sectors like construction and textiles to create more immediate jobs, but also give importance to industries like healthcare to generate employment in the long run.
"The government wants to scale-up its healthcare and welfare schemes, and apart from doctors and surgeons, you also need paramedics and nurses," he says.
Weak exports have also been a stumbling block when it comes to creating jobs. The government is expected to prioritise policies that will make small- and medium-sized businesses more competitive.
Spurring consumer demand
The new GDP data make it clear that India is staring at an economic slowdown.
Unlike China, India's economic growth has been driven by domestic consumption over the past 15 years. But data released over the past few months suggest that consumer spending is slowing.
Sales of cars and SUVs have slumped to a seven-year low. Tractor, motorbike and scooter sales are down. Demand for bank credit has sputtered.
Hindustan Unilever - India's leading maker of fast-moving consumer goods - has reported slower revenue growth in the past quarter. All of these are important benchmarks for measuring consumer appetite.
Mr Modi's Bharatiya Janata Party (BJP) promised that it would cut income tax to ensure greater purchasing power.
Gaurang Shetty, vice-president of a brokerage firm, believes that the government should also consider slashing personal and corporate taxes in the next budget, which will be announced in July.
"It will act as a stimulus for the economy," he says.
But India's 3.4% budget deficit - the gap between government expenditure and revenue - might restrict Mr Modi's options.
Experts say that the widening fiscal deficit could hold back medium- and long-term growth.
The agrarian crisis
This was a constant challenge for Mr Modi in his first term. Farmers across the country regularly protest, demanding higher crop prices and loan waivers.
The BJP has promised to extend a scheme that offers income support for small- and medium-sized farmers to include all farmers.
"Income support is a stop-gap arrangement but it is not a long-term solution," says Mr Joshi, adding that the agrarian sector is in need of structural changes.
Currently, farmers sell their produce to state-owned agencies at a fixed price. Mr Joshi says he would like to see farmers given direct access to markets and sellers.
Fixing the country's agriculture sector has been a long-standing demand. More than half of India's population relies on farming, which makes farmers an important voting bloc.
But experts hope that the BJP's thumping majority - the party's coalition won 354 of the 545 lower house seats - will allow it to enact reforms to transform agriculture into a modern industry.
The push for privatisation
One of the BJP's biggest pledges was to spend $1.44tn (£1.14tn) to build roads, railways and other infrastructure. But many observers say that the gargantuan sum will come from private industry.
Mr Modi made little progress on his promise to sell government-owned enterprises, including the debt-ridden national carrier Air India.
Gaurang Shetty expects Mr Modi to pursue privatisation more aggressively this time.
"The Indian stock markets have been euphoric and the rally is likely to continue for a while. It's the ideal time to sell stakes in loss-making companies," he says.
Experts also reckon that embracing bolder policies could entice more foreign investment.
As unemployment climbs in India, job creation is top of the agenda
Private investment has been lagging for the past few years, and India's impressive economic growth in the past decade has largely been driven by government expenditure.
During Mr Modi's first term, his government reduced red tape, helping move India to 77th spot in the World Bank's 2019 Doing Business ranking - a vast improvement from its earlier rank of 134.
But experts say more needs to be done to attract private and foreign investment - and they say that it has to happen quickly.
"The first two years is the time to bite the bullet. The results will take time to show but it would make a huge difference to India's overall growth story, " Mr Joshi says.
GDP growth slips to 5.8% in March quarter
India’s economic growth suffered a third straight quarterly fall in the first three months of 2019 to 5.8 percent, according to government figures.
India’s economic growth suffered a third straight quarterly fall in the first three months of 2019 to 5.8 percent, according to government figures, throwing up an immediate challenge to Prime Minister Narendra Modi’s new administration.
GDP growth for the world’s sixth biggest economy was down from 6.6 percent in the last quarter of 2018 and came well below predictions of 6.3 percent given by many analysts.
The announcement meant India had lost its place as the world’s fastest-growing major economy to China, which is currently on 6.4 percent growth.
The Indian government also estimated that the economy grew by 6.8 percent in the year up to March 31, down from 7.2 percent the year before.
The figures were released only hours after Modi named Nirmala Sitharaman as new finance minister in his government, which took office Friday.
The right-wing government won a landslide election victory this month but has been on the defensive over its handling of the economy.
While the economy has regularly grown at about 7.0 percent since Modi came to power in 2014, it has failed to create enough jobs for the 1.2 million Indians who come on the labour market each month.
(The story has been published from a wire feed without any modifications to the text, only the headline has been changed.)
First Published: May 31, 2019 18:02 IST
India's economy stumbles badly as Narendra Modi begins his second term
New Delhi (CNN Business) — Narendra Modi just won a second term as prime minister of India. His most urgent task will be getting the country's economy back on track.
Gross domestic product expanded 5.8% in the quarter ended March, according to data released Friday. That's a sharp decline from 6.6% growth in the previous quarter and the weakest rate in two years.
It also means India has surrendered the title of world's fastest-growing major economy to China, which grew at 6.4% in the same period.
Modi, who first swept to power in 2014 on promises to revive India's economy and boost growth, won re-election by an even bigger margin in the latest vote which concluded on May 23.
Yet growth has eroded over the past three quarters after hitting 8% in the middle of 2018.
Another set of figures released on Friday revealed that India's unemployment rate hit 6.1% in the fiscal year ended 2018 — reportedly the country's highest in over four decades.
An estimated 12 million young Indians join the workforce every year, and the country needs to grow much faster in order to provide jobs for all of them.
The mammoth task of reversing the slump will fall to India's new Finance Minister Nirmala Sitharaman, who took charge of the economy just hours before the growth numbers were released.
Arun Jaitley, the Modi government's top finance official in its first term, announced earlier this week that he would step down from the cabinet due to health reasons.
Sitharaman "faces a delicate balancing act" to jump start India's economy, Shilan Shah, India economist at Capital Economics, wrote in a note Friday.
"She is likely to come under growing pressure to loosen policy to support the economy amid signs that growth has slowed," Shah said.
India's central bank, the Reserve Bank of India, has already cut interest rates twice this year in order to boost growth and will likely do so again next week.
"A third consecutive rate cut now looks a done deal," Shah added.
India no longer world's fastest-growing economy
India's economy has grown at its slowest pace in almost five years, according to the latest data released by the government.
The new numbers are a cause of concern for PM Narendra Modi, who started his second term on Thursday, writes the BBC's Sameer Hashmi.
In the past financial year - April 2018 to March 2019 - the economy grew by 6.8%. And in the quarter between January and March, it expanded by just 5.8% - falling behind China's pace for the first time in nearly two years.
This means India is no longer the world's fastest-growing economy. And it will be a challenge for the new finance minister, Nirmala Sitharaman, only the second woman to hold the post after former PM Indira Gandhi.
Ms Sitharaman has headed important ministries like commerce and defence during Mr Modi's first term. But she takes charge at a time when the economy is faltering.
Where are the jobs?
The immediate concern will be to help restore confidence in the economy.
"It's important to strike a balance between short-term and long-term priorities," economist Dharmakirti Joshi says.
One of the pressing challenges is job creation.
The biggest criticism of Mr Modi during his first term was his government's failure to generate employment. According to a government report, unemployment touched a 45-year high between 2017 and 2018.
Mr Joshi believes the government should focus on labour-intensive sectors like construction and textiles to create more immediate jobs, but also give importance to industries like healthcare to generate employment in the long run.
"The government wants to scale-up its healthcare and welfare schemes, and apart from doctors and surgeons, you also need paramedics and nurses," he says.
Weak exports have also been a stumbling block when it comes to creating jobs. The government is expected to prioritise policies that will make small- and medium-sized businesses more competitive.
Spurring consumer demand
The new GDP data make it clear that India is staring at an economic slowdown.
Unlike China, India's economic growth has been driven by domestic consumption over the past 15 years. But data released over the past few months suggest that consumer spending is slowing.
Sales of cars and SUVs have slumped to a seven-year low. Tractor, motorbike and scooter sales are down. Demand for bank credit has sputtered.
Hindustan Unilever - India's leading maker of fast-moving consumer goods - has reported slower revenue growth in the past quarter. All of these are important benchmarks for measuring consumer appetite.
Mr Modi's Bharatiya Janata Party (BJP) promised that it would cut income tax to ensure greater purchasing power.
Gaurang Shetty, vice-president of a brokerage firm, believes that the government should also consider slashing personal and corporate taxes in the next budget, which will be announced in July.
"It will act as a stimulus for the economy," he says.
But India's 3.4% budget deficit - the gap between government expenditure and revenue - might restrict Mr Modi's options.
Experts say that the widening fiscal deficit could hold back medium- and long-term growth.
The agrarian crisis
This was a constant challenge for Mr Modi in his first term. Farmers across the country regularly protest, demanding higher crop prices and loan waivers.
The BJP has promised to extend a scheme that offers income support for small- and medium-sized farmers to include all farmers.
"Income support is a stop-gap arrangement but it is not a long-term solution," says Mr Joshi, adding that the agrarian sector is in need of structural changes.
Currently, farmers sell their produce to state-owned agencies at a fixed price. Mr Joshi says he would like to see farmers given direct access to markets and sellers.
Fixing the country's agriculture sector has been a long-standing demand. More than half of India's population relies on farming, which makes farmers an important voting bloc.
But experts hope that the BJP's thumping majority - the party's coalition won 354 of the 545 lower house seats - will allow it to enact reforms to transform agriculture into a modern industry.
The push for privatisation
One of the BJP's biggest pledges was to spend $1.44tn (£1.14tn) to build roads, railways and other infrastructure. But many observers say that the gargantuan sum will come from private industry.
Mr Modi made little progress on his promise to sell government-owned enterprises, including the debt-ridden national carrier Air India.
Gaurang Shetty expects Mr Modi to pursue privatisation more aggressively this time.
"The Indian stock markets have been euphoric and the rally is likely to continue for a while. It's the ideal time to sell stakes in loss-making companies," he says.
Experts also reckon that embracing bolder policies could entice more foreign investment.
As unemployment climbs in India, job creation is top of the agenda
Private investment has been lagging for the past few years, and India's impressive economic growth in the past decade has largely been driven by government expenditure.
During Mr Modi's first term, his government reduced red tape, helping move India to 77th spot in the World Bank's 2019 Doing Business ranking - a vast improvement from its earlier rank of 134.
But experts say more needs to be done to attract private and foreign investment - and they say that it has to happen quickly.
"The first two years is the time to bite the bullet. The results will take time to show but it would make a huge difference to India's overall growth story, " Mr Joshi says.
GDP growth slips to 5.8% in March quarter
India’s economic growth suffered a third straight quarterly fall in the first three months of 2019 to 5.8 percent, according to government figures.
India’s economic growth suffered a third straight quarterly fall in the first three months of 2019 to 5.8 percent, according to government figures, throwing up an immediate challenge to Prime Minister Narendra Modi’s new administration.
GDP growth for the world’s sixth biggest economy was down from 6.6 percent in the last quarter of 2018 and came well below predictions of 6.3 percent given by many analysts.
The announcement meant India had lost its place as the world’s fastest-growing major economy to China, which is currently on 6.4 percent growth.
The Indian government also estimated that the economy grew by 6.8 percent in the year up to March 31, down from 7.2 percent the year before.
The figures were released only hours after Modi named Nirmala Sitharaman as new finance minister in his government, which took office Friday.
The right-wing government won a landslide election victory this month but has been on the defensive over its handling of the economy.
While the economy has regularly grown at about 7.0 percent since Modi came to power in 2014, it has failed to create enough jobs for the 1.2 million Indians who come on the labour market each month.
(The story has been published from a wire feed without any modifications to the text, only the headline has been changed.)
First Published: May 31, 2019 18:02 IST
India's economy stumbles badly as Narendra Modi begins his second term
New Delhi (CNN Business) — Narendra Modi just won a second term as prime minister of India. His most urgent task will be getting the country's economy back on track.
Gross domestic product expanded 5.8% in the quarter ended March, according to data released Friday. That's a sharp decline from 6.6% growth in the previous quarter and the weakest rate in two years.
It also means India has surrendered the title of world's fastest-growing major economy to China, which grew at 6.4% in the same period.
Modi, who first swept to power in 2014 on promises to revive India's economy and boost growth, won re-election by an even bigger margin in the latest vote which concluded on May 23.
Yet growth has eroded over the past three quarters after hitting 8% in the middle of 2018.
Another set of figures released on Friday revealed that India's unemployment rate hit 6.1% in the fiscal year ended 2018 — reportedly the country's highest in over four decades.
An estimated 12 million young Indians join the workforce every year, and the country needs to grow much faster in order to provide jobs for all of them.
The mammoth task of reversing the slump will fall to India's new Finance Minister Nirmala Sitharaman, who took charge of the economy just hours before the growth numbers were released.
Arun Jaitley, the Modi government's top finance official in its first term, announced earlier this week that he would step down from the cabinet due to health reasons.
Sitharaman "faces a delicate balancing act" to jump start India's economy, Shilan Shah, India economist at Capital Economics, wrote in a note Friday.
"She is likely to come under growing pressure to loosen policy to support the economy amid signs that growth has slowed," Shah said.
India's central bank, the Reserve Bank of India, has already cut interest rates twice this year in order to boost growth and will likely do so again next week.
"A third consecutive rate cut now looks a done deal," Shah added.
@ "mighty indian economy"! its so mighty that modi et al had to cook up numbers to show growth! 
