Indian economy suffers its worst slump

Indian economy suffered its worst slump on record in the April-June quarter, with the Gross Domestic Product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdown weighed on the already declining consumer demand and investment.
When compared to global players, the pandemic seems to have affected the Indian economy the most. The UK clocked a decline of 20.4 per cent in growth in the first quarter (April-June) while the United States recorded a decline of 9.5 per cent in growth in the same quarter.
Recession is defined as a fall in the overall economic activity for two consecutive quarters (six months) accompanied by a decline in income, sales and employment. At -23.9 per cent, India is staring at a recession because the Indian economy has witnessed a contraction in growth for the two consecutive quarters now. Crucial parameters like manufacturing, construction, trade, hotel industry have seen a decline and slid into negative.
A 23.9% contraction of the economy sets a poor record and shows that the nationwide lockdown which was in place in April and May has taken the economy back to the 2014 level, erasing the gains made since then.
The actual damage could be much more because the available figures are provisional as all data could not be collected during the lockdown days. The informal economy, which forms a major part of the economy and affects the lives of large numbers of people, has taken a most serious blow. There are no reliable estimates of its performance and when that too is added, the overall picture is likely to become bleak and dismal.  All sectors of the economy, except agriculture and allied activities, had a free fall.
The only green patch was the agriculture sector, which grew by 3.4% with a good rabi harvest. There is the prospect of a good Kharif harvest, too, which augurs well for the sector, though there are worries about the impact of uneven rainfall in some key farming regions.
A recent report of the Centre for Monitoring Indian Economy reveals worrisome date. It says that 50 lakh people lost their jobs in July after the loss of 1.77 crore jobs in April and 1 lakh in May. It negates the gain of 39 lakh jobs in June when the lockdown was lifted. With children’s studies compromised. The country stares at a downfall of a huge chunk of society unless steps are taken to ensure a level playing field for all.
 

- Prabhakar Purandare

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