India’s GDP Collapsed at the Covid-19 pirouette and sent the economists, businesses, and common men in a tizzy.
GDP flat curve precedes the Covid’s
- India’s GDP collapsed and reported its sharpest decline in the April-June quarter as production slipped 23.9% from a year ago, as stringent shutdowns are enforced across the world to curb the spread of the devastating coronavirus disease which jammed economic activity, consumption, and investment, leading to lower employment and income.
- The strict COVID-19 lockdowns in the nation during the first quarter morose the demand in the market. Personal spending, which accounts for nearly 60% of GDP, decreased 26.7% as buyers sworn off nearly all non-mandatory consumption.
- Export markets, which contribute to a fifth of GDP and demonstrate demand for Indian goods and services from abroad, dwindled by about 20%. Investment activity is the worst impacted, collapsing 47% and declining share of GDP to around 22% from 32% a year earlier as larger companies retained cash and refused to invest any money in the face of overwhelming odds, and smaller firms prioritized survival.
- Just the bright spot was agriculture. The market, which flourished from a good monsoon, raised a 3.4% annual growth in the June quarter compared to a 3% growth in the June quarter of 2019-20. Statistics of the National Statistical Office (NSO) revealed that GDP declined 23.9% in the April-June quarter of 2020-21 contrasted with 3.1% growth in the previous quarter (Jan-March). India’s downturn was the steepest among major economies.
- China has now stabilized with 3.2% growth in the April-June quarter after reporting a fall in the Jan-Mar quarter. Around the world, transportation and broadcasting — which drops 47%, are affected by pandemic-linked restrictions.
- Also, the ever-increasing curve of new COVID-19 infections and a high level of job losses and income destruction are sure to slow any progress retrieval. Investment growth reported a significant decline of 47.9% in the June quarter, as per a Care assessment.
- India’s Government and RBI unleashed a series of measures to reverse the slowdown and protect vulnerable sectors the time when India’s GDP Collapsed. “While higher growth in the agricultural sector and consequently rural demand would support the domestic economy, the decline in urban demand and growth would not be sufficient to compensate for that. India’s Government and RBI launched a range of measures to reverse the downturn and secure weak industries.
- The agricultural sector has also faced the agony of nature which amplified the collapsing function for the country’s GDP.
- The decline in GDP also led the opposition leaders to make withering remarks on the Government. Senior leader P. Chidambaram called it a matter of “surprise and shame” for the government.
The decline in GDP has been a perennial cause of worry for the Country. This has become more worrisome as the nation is already having a face-off with the pandemic caused economic disruptions on one hand and is also wrestling the adamantine chains of the natural calamities in various States on the other hand.
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