In accordance with the official data released by the National Statistical Office (NSO), Union ministry of statistics and programme implementation (Mospi) on August 31, 2020, India’s gross domestic product (GDP) contract by 23.9% (-23.9%) in April-June period quarter of 2020 due to downfall in businesses and livelihood amid COVID-19 pandemic induced nationwide lockdown restrictions.
- This data states slowing of consumer spending, private investments and contraction in exports in the March quarter. The growth of Indian economy in Q4 FY20 (January-March) quarter was also at the slowest pace in eight years at 3.1%.
- India’s real GDP fell to 26.9 lakh crore in constant terms, 23.9% lower than a year ago.
- Nominal GDP fell to Rs 38.08 lakh crore, 22.6% lower than the same period last year.
- In gross value added terms, the economy contracted 22.8%.
-This data will provide the first benchmark on the state of India’s economy after the pandemic.
-The June quarter GDP data is the worst contraction in the history of the Indian economy since Independence.
-According to the Bloomberg survey, India’s GDP is estimated to contract 18 % in the quarter May-June, 2020.
-The Covid-19 crisis has brought on India’s fourth recession since independence and the first since liberalisation. The economy last contracted in FY80. This is the first contraction since India began releasing GDP growth data on a quarterly basis in 1997-98
-Global economies are also experiencing contraction due to the Covid-19 pandemic. The International Monetary Fund (IMF) has estimated a global contraction of 4.9% in 2020.
Government support preventing deeper de-growth
Without the support of government expenditure, the GDP contraction would have been worse. The final consumption expenditure by the government recorded a five-quarter high expansion of 16.4% in Q1 FY21, preventing an even deeper de-growth in the overall GDP. Excluding government final consumption expenditure, GDP contracted by nearly 30% in Q1 FY21.
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In accordance with the annual Periodic Labour Force Survey (PLFS) for [July 2018 – June 2019] of National Statistical Office (NSO), MoSPI, India’s unemployment rate fell between July 2018 and June 2019 to 5.8% from 6.1% during the same period of 2017-18 while the Indian economy grew 6.1% in 2018-19, slower than the 7% expansion recorded the year before.
Minister of State (Independent Charge)– Rao Inderjit Singh
Secretary– Pravin Srivastava