On 30th September India’s Gross Domestic Product for the second quarter ended, the economy has contracted by 7.5 per cent as per the Government data shown on Friday. But this time the contraction is comparatively slower than the previous quarter slump of 23.9 per cent.
But there are a lot of visible recovery and Growth in the economy after India’s GDP remained Negative for two back to back quarters. The contraction in this quarter has pushed the country into its first Technical recession. But the recovery has held Hopes for the economy from turning by the end of this fiscal year.In the previous fiscal year the GDP had expanded by 4.4 per cent in the July-September quarter of 2019-20.
In the June quarter because Pandemic that resulted to the lockdown had the steepest fall in more than forty years in the recorded GDP.therefore it is expected that the GDP growth for the fiscal year will be negative 14 per cent.It might turnout different in the resumption of current economic activity.
Indian economy Key Highlights
- The agriculture sector grew by 3.4 per cent
- The trade and services sector showed a contraction of 15.6 percent which is lower than expected
- The financial sector shrinked to 8.1 per cent
- Trade,transportation,hotel and communication declined to 15.6 per cent.
- The second largest employer sector that is the construction sector contracted to 8.6 per cent.
- The development COVID-19 has boosted stocks.
After the lockdown was lifted the government also announced some stimulus packages-
- A $266 billion package to boost consumer demand and manufacturing in May.A large proportion of the package was loan provided by banks of which many were collateral.
- This package was followed by a $35.14 billion package in November to stimulate the economy by consumer demand,manufacturing,boosting jobs,agriculture and exports which have been affected by the COVID-19 pandemic.
The aim if these incentives is to attract investment and help India become the part of a global supply chain.
Finance Minister Nirmala Sitharaman also said that a strong economic recovery is being established citing an increase in tax collection for goods and services.
However the recent surge in cases is likely to disrupt sectors like transport,hotel etc as the lockdown is likely to renew.