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Business Economy 31 Aug 2020 Indian economy contr ...

Indian economy contracts 23.9% due to COVID-19 impact

DECCAN CHRONICLE
Published Aug 31, 2020, 10:09 pm IST
Updated Aug 31, 2020, 10:09 pm IST
Agriculture stood out as the only outlier; all other sectors, including manufacturing, construction and services, suffered steep declines
India's GDP economic contraction exceeded all expectations. (Representative image)
 India's GDP economic contraction exceeded all expectations. (Representative image)

New Delhi: Finally the dreaded number that India has been frightening itself with is out: The GDP shrank by the steepest extent ever, 23.9 per cent, in the April-June period when the coronavirus brought the country to a standstill.

In the official data released on Monday, agriculture stood out as the only outlier; all other sectors, including manufacturing, construction and services, suffered steep declines.

 

In the same quarter last year, India's economy had grown by 5.2 per cent.

As per data released by the National Statistical Office (NSO), gross value added (GVA) growth in the manufacturing sector contracted by 39.3 per cent in the first quarter of 2020-21, from 3 per cent expansion a year ago.

However, farm sector GVA grew at 3.4 per cent, compared to 3 per cent in the corresponding period of 2019-20.

The construction sector GVA contracted by a whopping 50.3 per cent from 5.2 per cent expansion earlier. Mining output declined by 23.3 per cent, as against a growth of 4.7 per cent a year ago.

 

Electricity, gas, water supply and other utility services segments too shrank by 7 per cent against 8.8 per cent growth a year ago.

Similarly, trade, hotel, transport, communication and services related to broadcasting declined 47 per cent in the first quarter from 3.5 per cent growth earlier.

Financial, real estate and professional services fell by 5.3 per cent in Q1 FY21 from 6 per cent growth in same period last fiscal.

Public administration, defence and other services saw a decline of 10.3 per cent , from 7.7 per cent growth a year earlier.

 

"GDP at Constant (2011-12) Prices in Q1 of 2020-21 is estimated at Rs 26.90 lakh crore, as against Rs 35.35 lakh crore in Q1 of 2019-20, showing a contraction of 23.9 percent as compared to 5.2 percent growth in Q1 2019-20," the NSO said in a statement.

"With a view to contain spread of the Covid-19 pandemic, restrictions were imposed on the economic activities not deemed essential, as also on the movement of people from 25 March, 2020.

"Though the restrictions have been gradually lifted, there has been an impact on the economic activities as well as on the data collection mechanisms," it added.

 

It also said the timelines for filing statutory returns were extended by most regulatory bodies.

"In these circumstances, the usual data sources were substituted by alternatives like GST, interactions with professional bodies etc. and which were clearly limited," it said.

The Centre began easing the lockdown for certain economic activities from April 20 onwards.

Most rating agencies had projected contraction in India's GDP for the first quarter of 2020-21.

China's economy grew by 3.2 per cent in April-June after recording a decline of 6.8 per cent in January-March 2020.

 

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