New Delhi: India, the fifth-largest economy in the World, has officially entered a phase of recession according to the GDP data released for the first quarter (April-June) of the financial year 2020-21.
The released data released on Monday states that India’s GDP shrank by 23.9%, the sharpest contraction since the country started releasing quarterly data in 1996.
This means that the total value of goods and services produced in India in April, May, and June this year is 24% less than the total value of goods and services produced in India in the same three months last year.
The COVID-19 pandemic and the lockdowns imposed due to it can be greatly attributed to the slump. Continued restrictions on transport, educational institutions, and restaurants – and weekly lockdowns – have hit manufacturing, services, and retail sales, while keeping millions of workers out of jobs.
According to experts, the country is looking at a recession- that will happen only if the country reports contraction in the next quarter as well.
A country is considered to be in recession if it reports contraction for two successive quarters. India was last in recession in 1980.
The Indian economy’s negative growth is only dwarfed by the US economy, which shrank at a dizzying 32.9 percent annual rate in the April-June quarter.
Chief Economic Adviser KV Subramanian, while giving a statement on the latest GDP figures said, “The number is on expected lines, the global economy has taken a hit, India is not isolated. India is seeing a V-shaped recovery, agriculture has seen an uptick and it will continue to do so.”
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