Economy

Amid pandemic, India’s economy collapses by nearly 24 percent

New Delhi: India’s National Statistical Office (NSO) on Monday, released data that showed contraction of Indian GDP by 23.9% in Q1 against 3.1% growth in previous (January-March) quarter.

India’s contraction is the sharpest among major economies and is close to UK’s contraction of 20.4% in the second quarter.

In the list of worst hit economies due to the pandemic, India stands at number four, preceded by the United States of America with nearly 33% recession, Canada with a plunge of 38%, while Japan recorded a recession of 28%.

China however, has been the only country among the G7 countries to have recovered with 3.2% growth in the April-June quarter after posting a contraction in January-March quarter.

Quoting India’s chief economic adviser Krishnamurthy Subramanian, The Times of India reported that the contraction was expected given the lockdown that happened globally.

“India is definitely experiencing a V- shaped recovery. We should expect better performance in the subsequent quarter,” it further quoted Subramanian as having said after the release of the quarterly data.

Just a few years ago, India, with a population of 1.3 billion people, was one of the world’s fastest-growing large economies, clocking growth of 8 percent or more. But even before the pandemic, the economy had begun to slow down. For example, car sales plunged 32 percent in August last year, the largest drop in two decades, the New York Times report read.

The Reserve Bank of India (RBI) have unleashed measures to “foster” orderly market conditions and to protect the vulnerable sectors.

However, economists expect more to be done for reviving the growth of sectors hit hard by the pandemic.
Former Finance Minister P Chidambaram, has shared his views on the numbers calling them to be a matter of “surprise and shame” for the government.

He also took to twitter and wrote, “Of the world’s major and advanced economies, India’s economy declined more than any other country’s except the economy of the United States. What does that tell us? That Mr Modi stands second only to Mr Trump in terms of incompetent economic mismanagement.”

Of the world’s major and advanced economies, India’s economy declined more than any other country’s except the economy of the United States.

What does that tell us? That Mr Modi stands second only to Mr Trump in terms of incompetent economic mismanagement.

— P. Chidambaram (@PChidambaram_IN) August 31, 2020

Asia’s third largest economy in April- June suffered a contraction for the first time since it (India) began maintaining quarterly records in 1996, leading to job and income losses and shutting out of consumption and investment.

 

Free Press Kashmir is now on Telegram. Click here to Join.

Click to comment
To Top