The Gross Domestic Product (GDP) of India growth contracted by minus 7.5 percent in the July-September period of 2020-2021 as the economy rebounded after the steepest fall of -23.9 percent during the lockdown necessitated by the Covid-19 pandemic for April-June. However, the GDP growth reading for the second quarter is much better than the economists’ forecasts of -8.8 percent. With the economy’s GDP growth rate contracting in two quarters, it is said to have entered what is called a technical recession.
According to the Ministry of Statistics and Programme Implementation, gross value added (GVA) came in at minus 7 percent. The Indian economy contracted for the second straight quarter, albeit at a slower pace, as restrictions to curb the spread of Covid-19 were eased and he resumption of economic activities.
RBI Governor Shaktikanta Das had stated that the Indian economy has exhibited stronger than expected recovery and demand sustenance needs to be watched. According to RBI, there is a strong likelihood that the Indian economy will return to positive growth in Q3. However, downside risks do remain due to the resurgence of Covid cases both globally as well as in India.
Some sectors have bounced back with the resumption of economic activities including electricity, gas, water supply and other utility services have shown a growth of 4.4 percent. While agriculture, forestry and fishing sector at 3.4 percent and manufacturing sector showed a marginal growth of 0.6 percent.
During the first quarter of 2020-21, barring the agriculture sector, which grew 3.4 percent during the quarter, all other segments were in the red. Manufacturing, mining and construction contracted 39.3 percent, 23.3 percent and 50.3 percent respectively, while trade, transport, communication and related services contracted by 47 percent.
Finance Minister Nirmala Sitharaman, under Atmanirbhar Bharat, listed stimulus package worth Rs 2.65 lakh crore with a focus on job creation and sectors such as real estate, taking the total monetary and fiscal aid in the country’s battle against Covid-19 to Rs 29.88 lakh crore or 15 percent of its GDP.