First Time In 40 Years, Indian Economy Contracts By 7.3%

The Indian economy grew by 1.6 per cent in the January to March quarter (Q4) of 2020-21 from the previous year but shrank by 7.3 percent for the entire year. This is the worst contraction in more than 40 years.

Data furnished by the National Statistical Office on Monday, May 31, revealed that the country's Gross Domestic Product (GDP) contracted by 7.3 percent as against a growth of 4 percent in 2019-20.

However, it has fared better since the estimates made in January projected a 7.7 percent contraction, reported The Hindu.

According to the provisional estimates, the nominal GDP (without adjusting for inflation) shrunk to ₹197 lakh crore in FY21 from ₹203 lakh crore in FY20 while real GDP (adjusted for inflation) declined to ₹135 lakh crore from ₹146 lakh crore.

The devastating second wave of the pandemic and the COVID-related fatalities have severely impacted the country's economic activities. Meanwhile, the country has also been struggling with a slow vaccination drive.

The Centre for Monitoring Indian Economy (CMIE) stated that at least one crore Indians lost jobs amid the second phase of the virus outbreak which has also impacted the consumer spending.

The better-than-estimated numbers have been due to a number of sectors that were showing trends of revival before the second wave of the virus hit the country.

Agriculture, Forestry and Fishing showed a 3.6 percent full year growth and Electricity, Gas, Water Supply and other Utility Services rose by 1.9 percent.

The four sectors that contributed to the contraction were construction; mining and quarrying; manufacturing and trade, hotels, transport and communication.

Also Read: Worship Digitally : New Digital Initiative To 'Worship From Home' For Andhra Temples