The government has pegged the economic growth rate for 2019-20 at 5 percent, lower than the 2018-19 expansion rate of 6.8 percent.
The Central Statistics Office (CSO) put the advance estimate for FY20 real GDP growth at 5 percent, same as that of India's central bank. The Reserve Bank of India had in the December policy meet revised downwards to 5 percent its GDP outlook for 2019-20.
At 5 percent, the growth will be at an 11-year low. India's GDP—the total value of goods and services produced in the country—slumped to over a six-year low of 5 percent in the April-June quarter and 4.5 percent in the next quarter.
The numbers don’t come as a surprise as the signs of weakness in the economy have been clear enough for the last many quarters.
Will it roil the market?
Market veterans are of the view that these numbers may have a limited impact on market sentiment.
"The numbers are on expected lines. Historically, advance estimates have never been sort of bang on, so I don't think the market will be worried about it," said Pankaj Pandey, Head of Research at ICICI Securities.
Global developments, and not GDP numbers, are the bigger worry at the moment, Pandey said.
Sameer Kalra, the founder of Target Investing, also finds the growth forecast along expected lines.
"The GDP estimates are on the expected lines but there can be some upside risk to it. This will impact currency more and to some extent, bonds, but equity is more likely to get impacted by geopolitical and budget expectations," Kalra said.
VK Vijaykumar, Chief Investment Strategist, Geojit Financial Services, said while the estimates are as expected, the 5 percent print will put a strain on the country's fiscal mathematics, forcing the government to cut down on expenditure in the fourth quarter.
"This will further delay the recovery in growth. The growth recovery expected from Q1FY21 will be weak & slow," he said.
Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services, said the CSO estimate of 5 percent is higher than the brokerage’s forecast of 4.6 percent.
"CSO expects personal consumption growth to pick up from 4.1 percent in H1FY20 to 7.3 percent in H2FY20, which certainly seems optimistic to us. CSO also expects government consumption to continue to grow strongly at 8.5 percent in H2FY20, which seems challenging considering massive receipt shortfall," Gupta said.
While the slowdown is certainly a matter of worry for the investors, the market will look at government's measures to support the economy.
At this juncture, the US-Iran tensions and US-China trade relations will remain the top triggers for the market, while the budget will be a major factor in steering the mood of the market, experts say.