India officially enters technical recession, GDP contracts by 7.5 percent in Q2 of FY21
The GDP at Constant (2011-12) Prices in Q2 of FY 2020-21 was estimated at Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in Q2 of FY 2019-20.
The Indian economy contracted by 7.5 percent in the second quarter of the fiscal year 2020-21 (July to September), as per government data that was released on November 27, 2020. With this contraction, India officially entered a technical recession for the first time.
The contraction is a rebound from the earlier quarter of the fiscal year 2020-21. India's economy had contracted by 23.9 percent in the April to June quarter (Q1 FY21), which marked the first contraction in more than 40 years as the COVID-19 pandemic majorly impacted consumer demand and private investments.
According to the Ministry of Statistics and Programme Implementation, the gross value added (GVA) came in at minus 7 percent during the second quarter of FY21.
•The GDP at Constant (2011-12) Prices in Q2 of FY 2020-21 was estimated at Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in Q2 of FY 2019-20. This shows a contraction of 7.5 percent as compared to 4.4 percent growth in the second quarter of the Fiscal Year 2019-20.
•The quarterly GVA at Basic Prices at Constant (2011-12) Prices for the second quarter of FY 2020-21 was estimated at Rs 30.49 lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20. This showed a contraction of 7 percent.
•The second quarter of FY 2020-21 saw a -15.6 percent drop in trade, transport, communication and hotels. On the other hand, defence, public administration and other services saw a contraction of -12.2 percent.
•Further, the real estate, financial and professional services sector saw a contraction of 8.1 percent and construction by 8.6 percent.
Sectors that showed a rebound in Q2 FY21
Some sectors bounced back with the resumption of economic activities, as electricity, water supply, gas and other utility services showed a growth of 4.4 percent.
Other sectors including agriculture, the fishing sector and forestry also showed 3.4 percent growth and the manufacturing sector showed a marginal growth of 0.6 percent.
The Indian economy was already slowing before the pandemic struck, growing only 4.2 percent in the last fiscal year, its slowest pace in 11 years.