GDP plunges 23.9%, first negative growth

India’s economy saw its steepest fall in GDP growth in April- June 2020, the first quarter of this fiscal, as it contracted by 23.9 per cent — negative growth for the first time—as corona virusrelated lock downs weighed on the already-declining consumer demand and investment.

This is the sharpest contraction in 24 years — since quarterly figures started being released from 1996 — and contrasts with 3.1 per cent growth in January- March quarter and 5.2 per cent expansion in the same period last year, official data released on Monday showed.

The data showed that GDP at constant ( 2011- 12) prices in Q1 of 2020- 21 was estimated at ` 26.90 lakh crores, against ` 35.35 lakh crores in Q1 of 2019- 20, showing a contraction of 23.9 per cent. India’s economic activities were crippled after the nationwide lockdown imposed in

March to tackle the spread of Covid- 19.

Chief economic adviser K. V. Subramanian said: “We are witnessing a Vshaped

recovery as the economy unlocks e- way bills at 99.9 per cent vs August last year, despite local lockdowns. This will continue. Once the Unlock phase was undertaken, the decline has been progressively lower. The trend is of a V- shaped recovery. There is still residual uncertainty, that will persist till pandemic isn’t brought under complete control.”

The data shows manufacturing has already entered recession as output fell 39.3 per cent in the June quarter after falling 1.4 per cent in the earlier quarter. The positive news is that the farm sector’s annual growth stood at 3.4 per cent in April- June, offering hope that the rural economy can support millions of migrant workers who returned to their villages during the lockdown period. The data further showed that the manufacturing, construction and trade sectors reported massive slumps of 39.3 per cent, 50.3 per cent and 47 per cent respectively.