India’s economy contracted 7.5 per cent in the July-September 2020-21 quarter following a recrd 24 per cent drop of nearly 24 per cent in GDP in the April-June period, the first quarter of the current fiscal provisional data released by the National Statistics Office (NSO) showed.
This is the first time that the Indian economy has plunged into recession in the past 25 years even as the corona virus pandemic continues to weigh heavily on the Indian economy.
India’s economy had grown by more than 4 per cent in the same period last year.
For the April-June 2020-21 quarter, India’s GDP at constant (2011-12) prices is estimated at Rs33,14,000 crore, as against Rs35,84,000 crore in Q2 of 2019-20, showing a contraction of 7.5 per cent compared to 4.4 per cent growth in Q2 of 2019-20.
Gross value addition (GVA) for the quarterly at basic prices at constant (2011-12) prices for Q2 of 2020-21 is estimated at Rs30,49,000 crore, as against Rs32,78,000 crore in Q2 of 2019-20, showing a contraction of 7.0 per cent.
GDP at current prices for Q2 of 2020-21 is estimated at Rs 47,22,000 crore, as against Rs49,21,000 crore in Q2 of 2019-20, showing a contraction of 4.0 per cent as compared to 5.9 per cent growth in Q2 of 2019-20.
GVA at basic current prices in Q2 of 2020-21 is estimated at Rs42,80,000 crore, as against Rs44,66,000 crore in Q2 of 2019-20, showing a contraction of 4.2 per cent.
GDP at constant (2011-12) prices for the first half of the the fiscal (April-September 2020-21 is estimated at Rs60,04,000 crore as against Rs71,20,000 crore during the corresponding period of the previous year, showing a contraction of 15.7 per cent in H1 2020-21 as against growth of 4.8 per cent during the same period last year.
GDP at current prices for H1 2020-21 is estimated at Rs85,30,000 crore as against Rs98,39,000 crore during the corresponding period of the previous year, showing a contraction of 13.3 per cent in H1 2020-21 as against growth of 7.0 per cent during the same period last year.
The second quarter estimates are based on first advance estimates of agricultural production during Kharif season of 2020-21 obtained from the Department of Agriculture, Cooperation & Farmers’ Welfare, estimates of production of major livestock products, obtained from the Department of Animal Husbandry & Dairying and Fish production data from the Department of Fisheries.
The Index of Industrial Production (IIP), monthly accounts of union government expenditure maintained by Controller General of Accounts (CGA) and of state government expenditure maintained by Comptroller and Auditor General of India (CAG) for the period July-September 2020-21 have been used.
Performance of key sectors like transport, including railways, road, air and water transport etc, communication, banking and insurance during the period July-September 2020-21 and the performance of corporate sector during July-September 2020-21 based on data received from BSE/NSE has been taken into account while compiling the estimates, according to the NSO release.
The current recession of the economy could be attributed to the restrictions imposed with a view to contain the spread of the Covid-19 pandemic. Though the restrictions have been gradually lifted, there has been an impact on the economic activities. In these circumstances, some other data sources such as GST, interactions with professional bodies etc were also referred to for corroborative evidence, although to a limited extent, it added.