According to the data released by the National Statistical Office (NSO), India’s Gross Domestic Product (GDP) contracted sharply by 23.9% in the first quarter (April-June) of the financial year 2020-21.
This is the worst GDP slump since the country started releasing quarterly data in 1996.
In the preceding quarter (January to March) India’s economy had grown at 3.1%, its slowest pace in over six years.
India’s economy is expected to contract according to experts, mainly due to the quarter in review had seen more of the 68-day nationwide lockdown restrictions, which were enforced by the government from March 25 to contain the spread of the coronavirus disease (Covid-19) outbreak.
India has the third largest number of confirmed Covid-19 cases and deaths in the world. The country has reported 3.261 million cases with 64,469 deaths and 2.775 million recoveries. On Sunday it reported 78,761 new cases in 24 hours, the world’s highest single-day increase.
A Bloomberg poll of 31 economists had forecast that India GDP would contract by 18% in the April-June quarter.
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Sectoral Break down
A deeper dive into the GDP data shows that construction took the steepest hit along with manufacturing and the trade, hotels and transport segment.
- Agriculture sector grew at 3.4%.
- Mining sector contracted 23.8%.
- Manufacturing contracted 39.3%.
- Construction contracted 50.3%.
- Trade, hotel, transport, communication contracted 47%.
- Financial services sector contracted by 5.3%.
Market performance
The benchmark equity indices on the BSE and National Stock Exchange (NSE) erased all of their morning gains and crashed into a sea of red on Monday after reports of fresh tensions in the India-China border in eastern Ladakh.
After climbing 542.86 points (1.38 per cent) and briefly reclaiming the 40,000-mark (touching an intraday high of 40,010.17), the S&P BSE Sensex crashed 839.02 points (2.13 per cent) to end at 38,628.29. During the late afternoon trade, the 30-share BSE benchmark had fallen as much as 1,071.42 points (2.72 per cent) to a hit a low of 38,395.89 according to The Indian Express.
Likewise, the Nifty 50 too ended 305.15 points (2.62 per cent) lower at 11,342.45. In the early morning trade it had reached an intraday high of 11,794.25, which it soon erased and had slipped to 11,325.85.
Written by;
Ifunanya Ikueze
