New Delhi: India’s economy contracted by a whopping 23.9% in the first quarter of the 2021 financial year, in what is the latest sign of the toll that the COVID-19 lockdown has taken on economic activity.
According to data released by the statistics ministry on Monday evening, real GDP for the April-June 2021 quarter fell by 23.9% in comparison to the same quarter a year ago.
By most estimates, this is the first time that the Indian economy has seen a contraction in at least four decades and is the first GDP decline since the country began publishing quarterly growth figures in 1996.
India went into a full lockdown towards the end of March 2020, with the supply of all non-essential goods and services screeching to a near halt for most of April 2020 and May 2020.
Estimates put out by Bloomberg had predicted GDP for Q1 to slump by 19.2%, although other economists had pegged the fall slightly higher.
In the January-March quarter of this year, the economy had grown by 3.1% on a year-on-year – the lowest rate in over 17 years – and by 5.2% in the June quarter of 2019-20.
The rate of India’s GDP growth had declined from 6.1% in FY19 to 4.2 per cent in FY20, the slowest in 11 years.
According to government data, gross value added (GVA) for the country declined by 22.8%. Sectoral data showed that construction was down by 50.3%, manufacturing by 39.3%, and mining by 23%.
Gross fixed capital formation (GFCF), a measure of investments, contracted 52.9%, electricity 7%, and construction activities 50.3%. Agriculture and allied activities, meanwhile, were a bright spot, growing 3.4% during the quarter.