India has reported that its economic growth of around 9% three years ago has now fallen to half of that in the July to September quarter.
The gross domestic product (GDP) of India grew by just 4.5% during the quarter, the lowest level since early 2013. Last year, the country posted a GDP growth of 7% and it posted a 5% growth in the quarter prior.
The recent weakening of India's manufacturing industry has been partly attributed with the six consecutive quarters of decline in the economic growth. The sector's growth decreased to 1% last quarter compared to 6.9% during the same period last year.
Furthermore, the agriculture sector's growth rate has also fallen by more than half.
The slowdown in economic growth occurred under Prime Minister Narendra Modi, who previously promised to India's economy to new heights and create millions of jobs annually. Modi and his government targeted a double-digit growth and forecast the economy to reach $5 trillion by 2024-2025.
However, India, the third largest economy in Asia, has been facing various challenges over the past year. These include the loss of hundreds of thousands of jobs in the automotive sector, and the decline in demand for consumer goods, which prompted companies like Unilever to cut down its prices.
Modi and his government have been undertaking various initiatives to boost the economy, including relaxing regulations, introducing breaks for startups and offering cheaper home and car loans. Interest rates have also been reduced by the Reserve Bank of India and is expected to do more.
In a research note, Capital Economics said: "With a strong rebound in the near term looking unlikely, there is a rising chance that the rate cut that is almost certain next week will be followed by another in February."
Despite this quarter's numbers, Ministry of Finance Secretary Atanu Chakraborty claims that growth would recover from the next quarter, emphasizing that the fundamentals of the Indian economy remained strong.
