Latest update on Indian economy GDP growth

Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!

 Latest update on Indian economy GDP growth

---

Read more on - Polity | Economy | Schemes | S&T | Environment

---

• MoSPI releases India GDP Q3 data: After two consecutive quarters of contraction, India’s Gross Domestic Product (GDP) for the October-December 2020 quarter (Q3) grew by 0.4 per cent positive, while the GDP for the entire financial year 2020-21 (FY21) is seen contracting (-)8 per cent. This is as per the second advanced and quarterly estimates of GDP released by the Ministry of Statistics and Programme Implementation (MoSPI).
• Revision: The GDP estimates in the previous two quarters stand revised. Latest data shows the GDP contracted by 7.3 per cent in July-September 2020 quarter (Q2) instead of the previous estimate of -7.5 per cent and by a sharp 24.4 per cent in April-June quarter (Q1) instead of the earlier reported -23.9 per cent. The Q1 contraction is the worst in the history of the Indian economy, which happened due to a strict nationwide lockdown because of the coronavirus (COVID-19) pandemic.

1. In its first advanced estimate released last month, the government had estimated the GDP in FY21 to contract by 7.7 per cent.
2. The GDP had expanded by 4.0 per cent (positive) in 2019-20.
3. The FY21 GVA at Basic Prices is estimated at -6.5 per cent.
4. In Q3, the manufacturing sector, which had a contraction of 1.5 per cent in Q2, rose by 1.6 per cent.
5. The agriculture, forestry and fishing sector grew 3.9 per cent in Q3. Agriculture has been the only sector to register a growth in all the three quarters.
6. Contraction was seen in trade, hotels, transport, communication and services related to broadcasting at 7.7 per cent in Q3, better from a contraction of 15.3 per cent in Q2. The construction sector showed a growth of 6.2 per cent, much better from a contraction of 7.2 per cent in Q2.

• Corporates happy: India Inc. reacted saying the recouping of the country’s economy to a positive trajectory in the third quarter is a promising sign as it portends the end of the pandemic-induced recessionary phase seen in the first-half of the fiscal year. Industry bodies said that the GDP will improve further in the coming months on the back of positive growth stimuli emanating from the Union Budget and initiatives like the Production Linked Incentive scheme unveiled by the government.
• People hit by ‘double whammy’ of low growth, high inflation: Attacking the government over the latest GDP numbers, some politicians said the people have been hit by the double whammy of low growth and high inflation for which the Modi government’s “gross mismanagement” is responsible. The third-quarter GDP data proves yet again that fault lines in the Indian economy are more visible than ever before. The economy has grown by a mere 0.4 per cent in the third quarter of the financial year 2020-21, which is far below estimation.
• Broad trends: The Indian economy will shrink overall by 8% in 2020-21. The coming year will pose some challenges for the government, spilling over from FY 21. Those will be

1. poor tax collections, forcing govt. to rapidly privatise public sector firms
2. poor jobs scene, and no specific plan or programme to generate crores of new jobs (except MGNREGS rural)
3. low household incomes and generally high income insecurity (hence poor consumption uptick)
4. problematic exports scene and general de-globalisation
5. poor investment scene (since 2011 onwards) necessitating more govt. push and support

Read more on - Polity | Economy | Schemes | S&T | Environment

Join UPSC Self Prep course | Online Course (PT Gurukul)  | Covid Special Course | Join PT courses