It was just two weeks before a team of Reserve Bank of India(RBI) economist said India is in a technical recession. Now it officially has become a reality as Gross Domestic Product(GDP) data, which was released on November 28, confirmed the same.
The GDP contracted 7.5 percent in the July-September quarter of 2020-21.
The National Statistical Office( NSO) released the official GDP data which showed that the Indian economy has contracted in two consecutive quarters- called technical recession- for the first time since 1996, when the country began recording quarterly growth rates.
The GDP at constant (2011-12) prices in Q2FY21 has been estimated at Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in Q2 of 2019-20, showing a contraction of 7.5 per cent, according to the official NSO data.
“Quarterly GVA at Basic Prices at Constant (2011-12) Prices for Q2 of 2020-21 is estimated at Rs 30.49 lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20, showing a contraction of 7 per cent,” it added.
In the April-June quarter, the Indian economy had contracted by a huge margin of 23.9 percent due to the strict lockdown from the last week of March till early May.
The RBI’s internal model anticipated a GDP contraction of 8.6 per cent for the July-September quarter.
The economists had earlier expected a contraction in the second quarter of the fiscal.
They also expect a milder contraction of 3 per cent in the October-December quarter. The first expansion of the Indian economy by 0.5 per cent is expected in the January-March quarter next year.
A milder GDP contraction in July-September compared to April-June period has come on the back of a series of stimulus packages under the Atmanirbhar Bharat programme.
Atmanirbhar Bharat 3.0 measures worth Rs 2.65 lakh crore were recently announced by Union Finance Minister Nirmala Sitharaman.
The focus of the stimulus packages has been on job creation and restarting different sectors of the economy. The government has announced measures of a total worth of almost 30 lakh crore or about 15 per cent of the GDP.
Meanwhile Congress leader Rahul Gandhi slammed the central government and Prime Minister Narendra Modi soon after GDP date was released.
He said, “Under PM Modi, India’s economy is officially in a recession for the first time ever. More importantly, 3 crore people are still looking for work under MNREGA.”
Under PM Modi, India's economy is officially in a recession for the first time ever.
More importantly, 3 crore people are still looking for work under MNREGA.
Economy cannot be ordered to grow by diktats. PM needs to first understand this basic idea.
— Rahul Gandhi (@RahulGandhi) November 27, 2020
“The economy cannot be ordered to grow by diktats. PM needs to first understand this basic idea,” he added.
