India’s economy likely to grow 7%, government says

K.V. Subramanianin

Indian Chief Economic Advisor K.V. Subramanianin addresses a press conference on the Indian government report on the state of economy in New Delhi, India, Thursday, July 4, 2019. India’s government says the economy is expected to grow at 7% in 2019-20, up from a five-year low of 6.8% in the past year. Indian Finance Minister Nirmala Sitharaman presents the economic report in Parliament on Thursday, a day before unveiling the annual federal budget. India’s financial year runs April-March. (AP Photo/Manish Swarup)

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

NEW DELHI (AP) — India’s government said Thursday the economy is expected to grow at 7% in 2019-20, up from a five-year low of 6.8% in the past year.

Finance Minister Nirmala Sitharaman presented the economic report in Parliament a day before unveiling the annual federal budget after her Hindu nationalist party’s massive victory in April-May national elections. India’s financial year runs April-March.

Economic growth slowed to a five-year low of 5.8% in the January-March quarter with consumer spending and corporate investment faltering. Declining industrial output and automobile sales also raised fears of a deeper slowdown.

Despite recent headwinds, India is the world’s sixth largest and the fastest growing major developing economy. Prime Minister Narendra Modi is facing strong pressure to keep growth robust and create jobs for India’s 1.3 billion people.

The ministry attributed the slowdown to national elections and said higher economic growth is likely, with oil prices expected to decline in coming months.

“The expansion in the economy will be driven by investment and consumption, with political stability auguring well for the growth prospects,” it said.

Investment rate, which has been declining since 2012, seems to have bottomed out and is expected to pick up in consumer demand and bank lending, it said.

But for India to become a $5 trillion economy by 2025, more than double the current size, it needs to grow at an annual rate of 8%, Chief Economic Adviser Krishnamurthy Subramanian told reporters.

“The political stability in the country should push the animal spirits of the economy, while the higher capacity utilization and an uptick in business expectations should increase investment activity in 2019-20,” he said.

The report said that India’s foreign exchange reserves continue to be comfortably placed in excess of $400 billion.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

CBS47 On Your Side

Do you have a problem that you need help solving? Contact CBS47 and let us be On Your Side.

Phone: 559-761-0383

Images from Armenia

Small patients in Armenia
Yerevan by night.
Dr. Jeff Thomas delivers.
Dr. Jeff Thomas delivers in Gyumri.
Doctors unpack medical supplies from The Central Valley.
Fresno Medical Mission at work.
Medical Supplies being unloaded.
Fresno Medical Mission at the ready.
KSEE24 crew witnesses the miracle of life in Gyumri, Armenia.
Life saving work of Central Valley surgeons in Armenia.
Ribbon cutting on new surgical center in Ashtarak Armenia. Fresno donors made this dream come true.
KSEE24 on assignment with the Fresno Medical Mission
Honorary Consulate to Armenia Berj Apkarian explains the crisis facing one hospital.
KSEE24's Stefani Booroojian and Kevin Mahan at the meeting with President Bako Sahakyan.
Medical Meeting in Artsakh.
The President of Artsakh meets with the Fresno Medical Mission.
Learning modern medicine techniques with the Fresno Medical Mission in surgery.
Leaning in for a look. Dr. Brien Tonkinson holds class and helps a patient in Armenia.
Fresno Medical Mission cares on one of the smallest patients in the region. Six-year old Yanna receives life-changing better breathing surgery.