n The country’s GDP growth is likely to decline to 4.9 per cent in the second quarter of this fiscal due to sustained slowdown in virtually all the sectors, economic think-tank National Council of Applied Economic Research (NCAER)  said on Saturday. India’s economy grew at 5 per cent in the first quarter of 2019-20 — the slowest pace in over six years.

For the full fiscal 2019-20, the Delhi-based National Council of Applied Economic Research (NCAER) has pegged GDP growth at 4.9 per cent as against 6.8 per cent in 2018-19. Going forward, NCAER said the monetary policy measures are unlikely to revive growth at this juncture and suggested providing fiscal stimulus, which too can be challenging unless it can be financed through better revenue generation.

“Whether the growth deceleration may be bottoming out or not, we will know in next two weeks based on the Q2 growth figures of the Government. However, the current poor growth is mainly due to a demand problem. It can be addressed through fiscal measures,” NCAER Distinguished Fellow Sudipto Mundle told PTI on the sidelines of its event on ‘Mid-year review of the economy’. Emphasising that the focus should be on fiscal measures, Mundle said there is a need to pump up expenditure without pushing up the fiscal deficit.

There are ways of doing it, he said, adding, “We have a bold leader. There is a huge fiscal space which has not been used. It is myth that some say there is no fiscal space.” Mundle said revenue foregone is 5 per cent of the country’s GDP and about 1.5 per cent of GDP is locked up as excess appropriation of the budget which has not been spent, he said.