Indian economy is not doing well as is clear from its GDP growing at five per cent in the April-June , the first quarter of 2019-20, industrial production decelerating by 1.1 per cent for August, exports contracting by 6.57 per cent in September and retail inflation kissing the 4 per cent mark for September , almost ending options for the RBI to cut interest rates further. All this is purely government data, sombre enough to have prompted the International Monetary Fund to revise downward the growth projections for the Indian economy to 6.1 per cent for 2019 from its previous estimate of 7.3 per cent.
The latest data relates to merchandise exports which shrank to USD 26.03 billion in September, 2019 from USD 27.87 billion in September 2018, showing a contraction of 6.57per cent. Experts blame it on the global slowdown and the rising trade tensions between the US and China, the two largest economies of the world.
When it comes to industrial poduction, the situation is pretty bad. For the month of August 2019 the output declined by 1.1 per cent over the same month of the previous financial year. Fifteen out of 23 industry groups in the manufacturing sector have shown negative growth during the month.
If there is a degrowth in industrial production and a general slowdown, the government revenue was bound to come down. Revenue from Goods and Services Tax dropped well below the desired monthly level of Rs 1 lakh crore. For September, 2019 it was Rs 91,916 crore for September, lowest in 19 months. Illustratively, if less number of passenger cars, or commercial vehicles , is sold in the marketplace, the GST collection would commensurately decline