The Indian economy contracted by a record 23.9% in the April-June 2021 quarter, as the country went into the lockdown to curb the spread of the Covid-19 virus. India’s real GDP fell 23.9% lower than a year ago, showed data released by the Ministry of Statistics and Programme Implementation on Monday, reported by Bloomberg. In gross value added terms, the economy contracted 22.8%.
The Covid crisis has brought on India’s fourth recession since independence and the first since liberalisation. The economy last contracted in FY1980. This is the first contraction since India began releasing GDP growth data on a quarterly basis in 1997-98.
A deeper dive into the GDP data shows that construction took the steepest hit along with manufacturing and the trade, hotels and transport segment.
|1Q GDP Data -23.9% in April June|
|Power & Gas||-7%||8.80%||4.50%|
|Finance , Real Estate||-5.30%||6%||2.40%|
- Private consumption, reflected in private final consumption expenditure, fell 26.7%.
- Investments, as reflected by gross fixed capital formation, contracted 47.1%.
- Government final consumption expenditure grew 16.4%.
- Net exports of goods and services contracted 19.8%.
India’s fiscal deficit breached the full-year target in April-June as the coronavirus pandemic continues to weigh on the government’s revenue.
The gap between revenue and expenditure reached Rs 8.21 lakh crore, or 103% of the budgeted estimate, during the reported period, according to data on the website of the Controller General of Accounts. That compares with the deficit of 79% of the budgeted target in the year-ago period.
India was already grappling with an economic slowdown when the virus struck. The lockdown, effective March 25, stalled all business activities, except essentials, and capped consumption. While the curbs have slowly eased since May-end, the nation is still headed toward its first annual contraction in more than 40 years. India’s real GDP contracted 23.9% in the April-June quarter, according to data released by the Ministry of Statistics and Programme Implementation.
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