The Indian economy contracted by 23.9 per cent in the April-June quarter of this fiscal amid the COVID-19 crisis, official data showed on Monday. The gross domestic product (GDP) had expanded by 5.2 per cent in the corresponding April-June period of 2019-20, according to data released by the National Statistical Office (NSO).

Commenting on the GDP data, India’s Chief Economic Adviser to the Government Krishnamurthy Subramanian noted, “As the world economic outlook has highlighted, the fraction of countries, where GDP per capita would decrease is the highest since 1870, so once in a one and a half century event, which is what we are going through. India was also in a Lockdown all through the April-June quarter with the majority of economic activities being restricted, so this trend is along the expected lines.”

Meanwhile according to a report by Bloomberg, this is “the biggest contraction among major economies last quarter, with a recent surge in coronavirus infections weighing on the outlook for any recovery”, making it “the sharpest decline since the nation started publishing quarterly figures in 1996, and was worse than any of the world’s biggest economies tracked by Bloomberg”.

A report by BBC added, “Experts fear that India is staring at a recession – that will happen only if it reports contraction in the next quarter as well, which experts say is likely. A country is considered to be in recession if it reports contraction for two successive quarters. India was last in recession in 1980, its fourth one since independence in 1947.”

“India’s economy was already faltering when Covid-19 struck. Last year, unemployment touched a 45-year high and growth dipped to 4.7%, the lowest in six years. Output was shrinking as demand fell and banks were burdened by a mountain of debt. Then came a global pandemic, which only worsened the situation. An unprecedented lockdown at the end of March forced many factories and businesses to shut temporarily, brining most economic activity to a halt. One month into the lockdown, 121 million Indians had lost their jobs, according to the Centre for Monitoring Indian Economy (CMIE), an independent think tank,” BBC added.

– TIN Bureau

India’s faltering GDP (April-June 2020)

Over all growth rate: -23.9%

Construction: -50.3%

Trade and hotel: -47%

Manufacturing: -39.3%

Industries: -38.1%

Mining: -23.3%

Electricity and gas: -7%

Financial services: -5.3%

Agriculture (lone bright spot): +3.4%