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India’s GDP Growth Rate Shrinked by 23.9% in Quarter 1 Of Fiscal Year 21

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India's GDP Growth Rate Shrinked by 23.9% in Quarter 1 Of Fiscal Year 21
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The data released by the National Statistical Office(NSO), under the Ministry of Statistics and Programme implementation, provided the first benchmark on the state of India’s economic condition after the pandemic.

It released India’s Gross Domestic Product for April- June quarter slipped by 23.9%. The June data quarter showed the worst contraction in the history of economics since independence.

Economists surveyed by Bloomberg showed India’s GDP decline 18%in the quarter ended. Continous and immediate lockdown lead to the tragic downfall of the country’s economy.

The country’s negative surprising deficiency has been seen in trade, hotel, communication, transport altogether supported a loss of 47%, and construction contracting alone covered 50.3%.

Even the RBI can’t do much beyond what it has already done, for now, it will be on a court of government to monitor the consumption taking physical measures where RBI would restart with fundraising programs.

The GDP could upset the physical maths of government that may force changes in public finance estimates. The focus is for the month of September, and it is estimated that another one-digit decline may arrive, which will record the highest single-digit GDP decline on a YoY basis.

While the rural economy has offset the slowdown in urban areas in the first quarter to some extent, the rural recovery is expected to support such pace in subsequent quarters. One of the crucial reasons behind this is the pandemic started to penetrate more in the rural areas during July.

Pronab Sen, the chief statistician of India, said, “We suspect that smaller companies would have done worse than the larger companies, so we should expect one round of revision on that count,” he said.

The second revisions will happen when the informal sector data comes in, leading to larger modifications. India’s recovery condition seems to be the longest and hard one to work where a mixture of monetary as well as fiscal measures to prop up the economy.

While GDP is a lagging indicator, the first quarter’s steep contraction suggests the full-year contraction could be worse than the 5% estimated by economists.

Image Courtesy- Google

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