Corona Epidemic Due to the collapse of the first quarter of the financial year 2020-21, the country’s economy is now slowly improving.
This is the reason why India’s gross domestic product (GDP) declined by 7.5 percent in the second quarter (July-September). Whereas in the first quarter GDP declined by 23.9 percent.
In such a situation, the economy is showing improvement, but due to the second consecutive decline, the country has reached ‘technical recession’.
How is GDP derived?
The total value of production in the country within a given time is called GDP. In easy language, if you add the value of all goods and services made in the country, from needle to plane, then GDP will be available.
Decline below the estimates of experts
Many experts were already anticipating India’s growth rate to be negative in the July-September quarter as the economic activity across the country had not picked up in these three months.
In view of this, experts had predicted a fall of over 8 percent, but the data released has proved the experts’ estimate to be wrong. In such a situation, it is expected that the situation will improve in the coming time.
RBI had forecast a fall of 8.6 percent
The Reserve Bank of India had projected a 8.6 percent fall in GDP. Similarly, India Ratings had predicted 11.9 per cent, State Bank 10.7 per cent, Bank of Baroda 8 per cent, Nomura 10.4 per cent, Barclays 8.5 per cent.
Similarly, Bank of America Merrill Lynch forecast a 7.8 percent decline, Morgan Stanley six percent, ICRA 9.5 percent and CARE 9.9 percent decline in GDP growth.
That is why it can be called ‘technical slowdown’
NDTV According to experts, when the GDP of a country declines for two consecutive quarters, it is called recession. In this case, India has recorded two consecutive declines. Looking at this, it can be called a technical slowdown.
Although the economy has improved compared to the first quarter, the presence of the Corona epidemic may further impact the economy further. In such a situation, concrete steps have to be taken.
Boom in agriculture and manufacturing sector
In the second quarter, agriculture, fisheries and forestry sectors have gained momentum. According to the data, the agriculture sector recorded the highest growth of 3.4 percent and 0.6 percent in the manufacturing sector this quarter.
In contrast, construction sector declined by 8.6 percent, trade, hotels, transport sector by 15.6 percent, finance, real estate by 8.1 percent and public administration, defense sector by 12.1 percent.
Historical decline was seen in the last quarter
In the first quarter (April-June) of the current financial year, India GDP registered a decline of 23.9 percent.
Ever since the country’s GDP figures began to collect, it was the lowest growth rate ever and after the economic liberalization in 1991-92, the country’s growth rate went into negative for the first time.
Please tell that between April-June, there was a lockdown due to Corona epidemic and economic activities were stopped all over the country.
There has also been a decrease in corona cases in the country
The cases of corona in the country are also declining daily. In September, there were around 97,000 cases per day in the country, which have now fallen to between 40,000 and 50,000. This will accelerate the economy in the coming times.