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GDP falls 23.9% in first quarter
Why is it in news?
- India's Gross Domestic Product (GDP) shrank by a record 23.9% in the April to June quarter in comparison to the same period last year.
- It is India's worst contraction in decades.
Details:
- The contraction reflects the severe impact of the COVID-19 lockdown, which halted most economic activities.
- It is also a reflection of slowdown trend of the economy even pre-COVID-19.
- The economy is in a deeply vicious cycle, where demand is contracting so heavily.
- At the same time, the capacity to neutralise the contraction has also contracted equally because of the tax revenue contraction.
- Agriculture was the only sector which recorded a modest growth of 3.4% in year-on-year terms.
- Construction, manufacturing and trade, hotels and transport were the worst-hit sectors.