India's GDP contracts by 23.9%; first contraction in 40+ years
India's Gross Domestic Product (GDP) slipped by a sharp 23.9% in the first quarter (April-June) of the fiscal year 2020-21, according to data released by the National Statistical Office (NSO). This marks the first contraction in more than 40 years. The data offers the first benchmark of the state of India's economy after the coronavirus pandemic. Here are more details.
According to the data from NSO, which comes under the Ministry of Statistics and Programme Implementation (MoSPI), the GDP growth contracted by 23.9% in Q1, the worst contraction in Indian history. In comparison, India's economy had expanded by 3.1% in the January-March quarter. In the April-June quarter fiscal year 2019-20, India's GDP had expanded by 5.2%. The economy grew at 6.1% in FY19-20.
The contraction in India's economic growth is mainly because of the central government's move to order a nationwide lockdown in March-end, shutting down the manufacturing and service sectors. The Gross Value Added (GVA) at basic price at constant terms during the quarter shrunk 22.8%. Gross fixed capital formation was down 47% (year-on-year), while government final consumption expenditure was up 16% (YoY).
Except for agriculture, all sectors witnessed contractions in the April-June quarter. Construction witnessed a massive decline of 50.3%, while trade hotels, transport, communication, and services related to broadcasting contracted 47%. The manufacturing sector's slid 39.3%, mining and quarrying contracted 23.2%. Public administration, defense, and other services also slipped by 10.3%. Electricity, gas, water supply, and other utility services slipped 7%. Agriculture expanded by 3.4%.