Editorial : Slowdown signals: on Q2 growth estimates

Growth estimates for the second quarter show the challenge of shoring up rural demand
The growth(विकास ) estimates(अनुमान) for the July-September quarter from the Central Statistics Office show that the economy’s expansion(विस्तार/फैलाव)

predictably(अनुमानतः /जाहिर) slowed. GDP growth weakened to 7.1%, from the robust(मजबूत /ठोस) 8.2% in April-June, as rising oil prices combined(संयुक्त/मिश्रित) with a weakening rupee to dampen(कमी)demand. Gross value added (GVA) data show five of the eight sectors reflecting(दर्शाती/प्रतिबिंबित ) the slowdown from the first quarter, with only utility(उपयोगी ) services, public administration, defence and other services, and trade(व्यापार), hotel, transport, communication(संचार/संपर्क) and broadcasting services bucking(विस्र्द्ध होना/कम करने वाली ) the trend(झुकाव/प्रवृत्ति). Worryingly, GVA growth in agriculture, forestry and fishing eased to 3.8%, from 5.3% three months earlier, asfoodgrain(अनाज /खाद्यान्न) output in the kharif season inched up a mere 0.6% (production had expanded by 1.7% in the previous year). Given the distress(संकट/विपत्ति) in the farm sector, below-normal monsoon rains and a shortfall of over 8% in rabi sowing till November 30, the outlook for rural demand remains challenging at least for the next couple of quarters. This demand weakness in the hinterland is also evident(प्रत्यक्ष/स्पष्ट) in the consumption(खपत) spending data, with growth in private final consumption expenditure(लागत/खर्च) slowing to 7%, compared to 8.6% in the first quarter. Manufacturing, though posting a 7.4% expansion(वृद्धि/विस्तार), also poses cause for concern as the momentum almost halved from the June quarter’s 13.5% and slipped back nearer to the year-earlier level of 7.1%. Index of Industrial Production data reveal that growth in manufacturing output remained((बने रहे/टिकना) becalmed at 4.6% through August-September, and when seen alongside the weakness in car and two-wheeler sales, suggest an acceleration(गतिवृद्धि/तेज़ी) may be some time away.

To be sure, not all data paint a less-than-encouraging(प्रोत्साहित करना) picture. Gross fixed capital formation (GFCF), a key metric for investment(निवेश ) demand, expanded(विस्तृत/प्रसारित) by a robust 12.5%, building on the first quarter’s 10% increase, and constituted(गठित/निर्मित) 32.3% of GDP. With non-food bank credit also showing signs of a recovery, there is the discernible(साफ़/प्रत्यक्ष/नमूदार) prospect(संभावना/खोजना) of an investment revival(पुनस्र्त्थान/पुनरजीवन). An RBI research paper posits that improvement in investment activity is being driven by cyclical factors and may last up to 2022-23, when the investment rate as measured(मापा) by the GFCF is estimated to increase to 33% of GDP. The same RBI paper, however, points to risks to the investment outlook and flags the gross fiscal deficit as a key pressure point, given that borrowing by the government invariably(अनिवार्य रूप से/स्थिरता से) crowds(भीड़) out investment demand. Here, the latest expenditure and receipts figures released by the Controller-General of Accounts are not reassuring:(आश्वस्त) the fiscal(राजस्व/वित्तीय) deficit(घाटा/न्यूनता) crossed the budget estimate for the full year in just the first seven months, raising the chances that the Centre would miss its target of limiting the deficit to 3.3% of GDP. With multiple uncertainties looming(उभरते) on the global trade and growth horizon and elections approaching, India’s economic managers will need to be at their best to keep the momentum from sliding.

Important Vocabulary

1.Robust(मजबूत /ठोस)
Synonyms: booming, hearty, hefty, potent, powerful
Antonyms: fragile, impotent, incapable, ineffective, lethargic

2.Expanded(विस्तृत/प्रसारित) 
Synonyms: bolster, broaden, develop, enlarge, grow
Antonyms: close, compress, decrease, diminish, end

3.Bucking(विस्र्द्ध होना/कम करने वाली )
Synonyms: oppose, withstand, bound, combat, contest
Antonyms: agree, allow, surrender

4.Trend(झुकाव/प्रवृत्ति). 
Synonyms: direction, movement, tendency, aim, bearing

5.Distress(संकट/विपत्ति) 
Synonyms: ache, affliction, anguish, anxiety, blues
Antonyms: advantage, aid, blessing, calm, calmness

6.Expansion(वृद्धि/विस्तार)
Synonyms: development, enlargement, extension, increase, inflation
Antonyms: abridgment, compression, decrease, reduction, shrinkage

7.Remained((बने रहे/टिकना)
Synonyms: continue, endure, go on, hover, last
Antonyms: cease, die, discontinue, go, leave

8.Acceleration(गतिवृद्धि/तेज़ी)
Synonyms: dispatch, expedition, hurrying, quickening, spurring
Antonyms: slowing, deceleration, deferral, hindrance, retardation

9.Consumption(खपत)
Synonyms: drinking, expenditure, utilization, burning, damage
Antonyms: building, construction, creation, development, enlargement

10.Evident(प्रत्यक्ष/स्पष्ट) 
Synonyms: conspicuous, indisputable, noticeable, obvious, palpable
Antonyms: concealed, doubtful, dubious, hidden

11.Discernible(साफ़/प्रत्यक्ष/नमूदार
Synonyms: apparent, appreciable, audible, detectable, distinguishable, noticeable
Antonyms: ambiguous, doubtful, dubious, hidden, imperceptible

12.Prospect(संभावना/खोजना) 
Synonyms: anticipation, chance, expectation, forecast, future
Antonyms: hopelessness, impossibility, unlikelihood

13.Reassuring:(आश्वस्त)
Synonyms: assure, bolster, buoy, cheer, comfort
Antonyms: annoy, bring down, depress, discourage, dishearten

14.Deficit(घाटा/न्यूनता) 
Synonyms: loss, shortfall, arrears, defalcation, default
Antonyms: abundance, adequacy, advantage, enough, perfection

15.Looming(उभरते)
Synonyms: approaching, imminent, impending, appearing, emerging
Antonyms: distant, later

16.Revival(पुनस्र्त्थान/पुनरजीवन).
Synonyms: recovery, rejuvenation, renaissance, renewal, restoration
Antonyms: destruction, killing, suppression