India’s gross domestic product (GDP) contracted 23.9 % in the April-June quarter of 2020-21 from that in the same quarter last financial year, showed official data released by the National Statistics Office (NSO) on Monday. The COVID 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 quarterly in 1997-98.
This is the first instance of an economic contraction for the country in at least four decades, and also the first GDP decline since India began publishing quarterly numbers in 1996. In the January-March quarter of this year, the economy had grown by 3.1 % cent year-on-year, the lowest rate in over 17 years, and by 5.2 % in the June quarter of 2019-20. The rate of India’s GDP growth had declined from 6.1 % in FY19 to 4.2% in FY20, the slowest in 11 years.
All the sectors except agriculture witnessed contractions during the April-June quarter of 2020-21, with construction witnessing a drop of a whopping 50.3 % while the manufacturing industry saw a 39.3 % fall. Apart from these two industries, electricity, gas, water supply, and other utility services slipped 7%. Trade, hotels, transport, communication, and services related to broadcasting contracted 47.0%. Only the agriculture, forestry, and fishing industry witnessed a growth of 3.4 % in the June quarter, the data showed.
“GDP in the first quarter has declined by a whopping 23.9%. That means, about one-quarter of the gross domestic output as of 30-6-2019 has been wiped out in the last 12 months. Another way of looking at it is, since the end of 2019-20, the gross domestic output has fallen by about 20%,” Chidambaram said.
“The only sector that has grown is Agriculture, Forestry, and Fishing at 3.4%. The Finance Minister who blamed an ‘Act of God’ for the economic decline should be grateful to the farmers and the gods who blessed the farmers,” he added.
