The official data📃 for the Indian economy for the April-June quarter is out and it does not make for pretty reading😟.
The country’s Gross domestic product (GDP) fell📉 by a record 23.9% during this period compared to the previous year.
This was one of the most severe contractions of any national economy as a result of the Covid-19 pandemic😷 and was even worse😫 than most forecasts.
As a consequence, the current fiscal year could see the economy contracting by nearly 10%😱, the most ever since India’s independence.
The FY20-21’s 1st quarter saw consumer spending, the ☝️main driver of the economy, dropping 31% year-on-year.
While capital investments💰 went down by 47%, construction🏗️ and trade services plunged by a massive 50%.
Manufacturing🏭 which had already entered recession in the previous quarter, saw a huge output fall of 39%.
The only consolation came from the farm sector🌽 which recorded an annual growth of 3.4%.
Farming, which accounts for 15% of the economic output, saw this rise only due to the fact that millions of urban migrant workers who after losing their jobs😪 during the lockdown had returned to their native places.
A Grave mistake!
The above-mentioned data has confirmed that the 40-day lockdown🔒, the world’s strictest, imposed by the govt. in late March to control the Covid pandemic backfired, at least economically.
Although the govt. tried to make amends by announcing📣 a Rs. 20 lakh crore stimulus package in May, it failed to revive both consumer demand and manufacturing.
The situation is unlikely to improve in the coming months🗓️ because of continuing and rapid spread of the coronavirus.