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GDP contracts by 23.9% in first quarter of FY 2020-21

GDP contracts by 23.9% in first quarter of FY 2020-21

According to the recent National Statistical Office (NSO) data, India’s Gross Domestic Product (GDP) growth contracted by 23.9% in the first (April-June) quarter of 2020 compared to the same period (April-June) in 2019.

GDP is the total value of a country’s annual output of goods and services. It gives the economic output from the consumers’ side. GDP is a measure of economic activity of the country.

Construction sector was the most hit sector that recorded a contraction of 50.3%, followed by trade, hotels, and other services(47%), manufacturing (39.3%), and mining at 23%. This mirrors the phenomenal suspension of monetary movement in the principal quarter of this financial-year because of the pandemic and the arrangement of lockdowns. Only the agriculture sector showed growth at 3.4%.

source: ministry of statistics and program implementation

The private consumption fell by 27%, and the investment by private sector businesses fell by 47%. These are the two main engines that drive the Indian economy. Although the net export demand was seen to be positive but it was only because the imports fell more than the exports. While on paper, this provides a boost to overall GDP, it also points to an economy where economic activity has plummeted.

Construction and manufacturing creates the maximum number of jobs in this country, and they are the worst hit. People will either lose their jobs or will fail to get one.

Instead of being clueless and helpless, and and blaming it on God the government should find and work on ways to revive the economy.

With the Sputnik V, Russia’s Covid-19 vaccine already registered and many other nations on their last phase of testing, it seems like the virus won’t stay here for long. It is only then the demand can be created so that the construction and manufacturing industries could meet the demand and the plummeted economy may see a change of course towards the opposite direction.

Also the shifting of companies from China to India may help boost the economy.

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About The Author

Nikhil Thakur

Editor @magazinegogo

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