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NEW DELHI: India’s gross domestic product (GDP) growth for the first quarter (ended June 30) of financial year 2020-21 suffered largest quarterly slump of 23.9%, data released by the government showed on Monday. The sharp contraction in GDP numbers is mainly due to closure of business activity during the quarter owing to nationwide lockdowns to curb the spread of the deadly coronavirus.
The GDP figure stood at 3.1 per cent in the January-March period (Q4) of the financial year 2019-20.
While the lockdown was partially lifted in phases, it was reimposed by certain states to check the surge in number of cases. As a result, economic growth took a major hit.
Consequently, the Centre rolled out Rs 20 lakh crore ‘Atmanirbhar Bharat’ stimulus package aimed at spurring growth and building a self-reliant India.
In addition, the Reserve Bank of India (RBI) has slashed interest rates by 115 basis points (bps) since March, suggesting more is required to shield the economy from the pandemic-induced disruptions to businesses and livelihoods.
In its bi-monthly monetary policy meet earlier this month, the RBI sounded a note of caution saying that protracted spread of Covid poses ‘downside risk’ to the domestic economy which is expected to remain in the negative zone in the current fiscal.
Last week, the central bank had said that the contraction in economic activity was likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appear to have lost strength following reimposition of lockdowns to contain the coronavirus pandemic.
Although there have been some signs of green shoots in the economy, with an increase in agricultural produce on good monsoon rains and targeted government spending, a majority of other businesses continue to show weak performance. Besides, consumer demand and manufacturing sectors are yet to witness recovery.
However, India’s economic growth was slowing even before the outbreak of the pandemic. GDP growth of 4.1 per cent in Q3 FY 2019-20 was the lowest since the global financial crisis more than a decade ago.
(With agency inputs)
The GDP figure stood at 3.1 per cent in the January-March period (Q4) of the financial year 2019-20.
While the lockdown was partially lifted in phases, it was reimposed by certain states to check the surge in number of cases. As a result, economic growth took a major hit.
Consequently, the Centre rolled out Rs 20 lakh crore ‘Atmanirbhar Bharat’ stimulus package aimed at spurring growth and building a self-reliant India.
In addition, the Reserve Bank of India (RBI) has slashed interest rates by 115 basis points (bps) since March, suggesting more is required to shield the economy from the pandemic-induced disruptions to businesses and livelihoods.
In its bi-monthly monetary policy meet earlier this month, the RBI sounded a note of caution saying that protracted spread of Covid poses ‘downside risk’ to the domestic economy which is expected to remain in the negative zone in the current fiscal.
Last week, the central bank had said that the contraction in economic activity was likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appear to have lost strength following reimposition of lockdowns to contain the coronavirus pandemic.
Although there have been some signs of green shoots in the economy, with an increase in agricultural produce on good monsoon rains and targeted government spending, a majority of other businesses continue to show weak performance. Besides, consumer demand and manufacturing sectors are yet to witness recovery.
However, India’s economic growth was slowing even before the outbreak of the pandemic. GDP growth of 4.1 per cent in Q3 FY 2019-20 was the lowest since the global financial crisis more than a decade ago.
(With agency inputs)
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