COVID-19 pushes India’s economy to record slump

As the global economic toll of the coronavirus pandemic continues, the Indian economy has become its biggest victim, as the country’s gross domestic product (GDP) growth for the first quarter (ended June 30) of the financial year 2020-21 suffered largest quarterly slump of 23.9 percent.

As per the data released by the Indian government, the massive contraction by almost a quarter in GDP numbers is mainly due to closure of business activity during the quarter owing to nationwide lockdowns imposed by the government to curb the spread of the deadly coronavirus.

Meanwhile, the India GDP figure stood at 3.1 percent in the January-March period (Q4) of the financial year 2019-20, whereas the economy grew by 5.2 percent in the same period last fiscal. “GDP at constant (2011-12) prices in Q1 of 2020-21 is estimated at INR 26.90 lakh crore, as against INR 35.35 lakh crore in Q1 of 2019-20, showing a contraction of 23.9pc as compared to 5.2pc growth in Q1 2019-20,” the ministry of statistics and program implementation said in its official release.

This is the sharpest contraction since quarterly figures started being published in 1996 and worse than what was expected by most analysts.

In order to revive the battered economy, Indian Prime Minister Narendra Modi announced a $266 billion package whereas, the country’s central bank slashed its interest rates and transferred billions of rupees in annual dividends to the government.