The Indian economy suffered the biggest decline in 4 decades. A contraction of 23.9 percent was registered in the GPD of the April-June quarter. Although the main cause for this reduction in GDP growth is lockdown, it is not the only reason. If we look at the figures, the economy was going through a continuous decline for the last about 5 years. The manufacturing sector, called the main pillar of the economy, decreased by 39.3%, construction by 50.3% and trade by 47%. Apart from this, the economy has been battered due to a huge reduction in consumption and private sector investment.
Recently, Finance Minister Nirmala Sitharaman had blamed Corona for the economic slowdown in the country and said it is an ‘Act of God’. However, this is not completely true and the economy has been continuously declining for the last about 5 years. Talking about the financial year 2019-20, GDP growth was 5.2% in the April-June quarter and then reduced to 3.1% in the fourth quarter. Talking about the figures from 2015-16 till now, this decline has continued.
India’s fall is highest in top 20 economies
Britain was the first country to suffer recession in top 20 economies by 21.7% so far, but now India has surpassed it and set an unsolicited record of number one. Apart from this, Spain is also at number two with a decline of 22.1%, while Britain has come third.
The figure could have been worse
In fact, the unorganized sector is not included in the GDP growth figures. But it has been affected the most during the lockdown period. The unorganized sector contributes significantly to manufacturing and construction. In such a situation, if that figures were included, then this decline would have been even more sharp.
The decline has been continuous for 5 years
India’s economic growth was 8% in 2015-16, followed by a slight improvement in 2016-17 and its rate increased to 8.2%. In 2017-18, this figure further slowed to 7.2%, while in 2018-19 it was 6.1%. After this, the figure fell to just 4.2% with a big fall in 2019-20. Economic experts say that the economy, which suffered a decline of 23.9% in the first quarter, could only be in negative growth this whole year.