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After GDP jolt, this is what is critical for Narendra Modi government

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Given the economy has been losing pace for several quarters now, and that the trend was noticeable even before demonetisation, the June quarter was never really expected to see a big bounce-back. However, the very sharp deceleration in GDP, at 5.7% y-o-y, and in GVA, at 5.6% y-o-y, are below even the most conservative forecasts. In fact, even during a very difficult time in Q4F17, GDP had clocked a reasonably good 6.1% y-o-y while GVA had grown at 5.6% y-o-y. This time around, the GDP has decelerated more than the GVA partly because of a big jump in subsidies during the quarter, up 40%-plus.

Not surprisingly, the manufacturing sector has borne the brunt of the GST rollout with companies compelled to resort to production cuts and to staying lean on inventory ahead of........

© The Financial Express