(Image source from: financialexpress.com)
India’s GDP has shrunk by 23.9 percent in the first quarter of the financial year 2020-21 which comes as a Pandemic Shocker.
In what comes as a shock amid the COVID-19 pandemic, India’s Gross Domestic Product (GDP) has shrunk by 23.9 percent in the first quarter of the financial year 2020-21.
The GDP of the country has fallen down from Rs. 35.35 lakh crore in Q1 of 2019-20 to Rs. 26.90 lakh crore in the first quarter of 2020-21, showing a shrink of 23.9 percent as compared to 5.2 percent of the growth in Q1 of 2019-20.
The information was released by the National Statistical Office (NSO) in a statement on Monday.
In the corresponding quarter in the last financial year, the Indian economy has registered a growth of 5 percent. In the previous quarter, Q4 FY 2019-20, India’s GDP growth rate was 3.1 percent.
The worst-hit sector in the first quarter of FY 2020-21 was the construction field which contracted by 50 percent. The hotel industry got shrunk by 47 percent, the manufacturing sector by 39.3 percent, and mining by 23.3 percent.
The only sector which managed the slump was agriculture which registered a growth of 3.4 percent.
COVID-19 Impact on the GDP
The GDP growth data accounts for the months of April, May, and June when a strict national lockdown was in place in the country due to the coronavirus pandemic.
The nationwide lockdown was announced by the Prime Minister Narendra Modi on March 24, 2020, for 21 days which was continued for another 19 days.
The economy is believed to have suffered during the June quarter as a result of the nationwide lockdown.
India is one of those countries which implemented the stringent lockdowns was also one of those countries which suffered one of the worst economic consequences.
India’s economic slump for the lockdown quarter is worse than the majority of the big global companies.
The UK’s economy has shrunk by 20.4 percent in Q1, while the Chinese economy grew by 3.2 percent.
Worst financial slump since 1996
This year’s Q1 GDP performance of India is the worst that the country reported since it started reporting quarterly GDP data in 1996.
Industry body FICCI’s latest Economic Outlook Survey has pegged India’s growth in the first quarter of 2020-21 at -14.2 percent and has predicted the growth for the financial year at -4.5 percent.
Sowmya Kanti Ghosh, the Chief Economic Advisor at the State Bank of India had said that India’s real GDP growth for the year 2020-21 would be -16.5 percent.
By Gayatri Yellayi