India GDP Q1 Data 2020: Owing to a strict nationwide lockdown due to the novel coronavirus (COVID-19) during the bulk of the first quarter of the financial year 2020-21, India’s Gross Domestic Product (GDP) for the April-June quarter (Q1) slipped by a sharp 23.9 per cent, as per provisional estimates released by Ministry of Statistics and Programme Implementation (MoSPI) on Monday. The GDP had expanded by 5.2 per cent in the corresponding quarter of 2019-20.
According to the economists surveyed by Bloomberg, India’s GDP is estimated to have declined 18 per cent in the quarter ended June. Earlier this month, the State Bank of India (SBI) Ecowrap report said the country’s GDP to contract by 16.5 per cent during the first quarter.
The June quarter GDP data is the worst contraction in the history of the Indian economy mainly because the central government on March 25 had ordered a complete lockdown of most of the manufacturing and service sectors owing to the spread of COVID-19. Only essential services such as food items and medicines were allowed during this period as the country tried to curb the spread of the virus across the country.
The GDP for the preceding January-March quarter (Q4) of 2019-20 had witnessed a growth of 3.1 per cent.
As per the government data, the gross value added (GVA) at basic price at constant terms during the June quarter shrunk 22.8 per cent. The GVA at Basic Price at Current Prices slipped 20.6 per cent in Q1 2020-21.
As per the data by the National Statistical Office (NSO), all key sectors except agriculture witnessed contractions, with construction witnessing a drop of a whopping 50.3 per cent while the manufacturing industry saw a 39.3 per cent fall. Apart from these two industries, electricity, gas, water supply and other utility services slipped 7 per cent. Trade, hotels, transport, communication and services related to broadcasting contracted 47.0 per cent.
Only the agriculture, forestry and fishing industry witnessed a growth of 3.4 per cent in the June quarter, the data showed.
Economy seeing V-shaped recovery, says Chief Economic Adviser
Chief Economic Adviser KV Subramanian told PTI the first-quarter economic performance was “driven primarily due to an exogenous shock that has been felt globally”. The World Economic Outlook, he said, had highlighted countries across the globe where GDP per capita would decrease the most since 1870 — once in one-and-a-half century event. “Which is what we are going through,” he said.
In an interview with CNBC-TV18, Subramanian said the country was witnessing a V-shaped recovery as the economy unlocks. “Despite local lockdowns, e-way Bills are at 99.9% year-on-year. Have to keep in mind that the pandemic will have its ebb and flow and that is not a short term uncertainty,” he told the media outlet.
P Chidambaram hits out at Centre over GDP data
Former union finance minister and senior Congress leader P Chidambaram hit out the BJP-led central government and termed the GDP numbers an “economic tragedy”, and said the “country was paying a heavy price” for the “nonchalant and uncaring” attitude of the Modi government.
“GDP in the first quarter has declined by a whopping 23.9 per cent. That means, about one quarter of the gross domestic output as on 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 per cent,” Chidambaram said.
“The only sector that has grown is Agriculture, Forestry and Fishing at 3.4 per cent. 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.
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