India’s economy has shrunk by 23.9% in the first quarter of the 2021 financial year, which is the most recent sign of the affect caused by COVID-19 on economic activities.
According to data released by the statistics department on Monday evening, the actual GDP for the quarter of April-June 2021 fell by 23.9% compared to the same quarter last year.
In hindsight, this is the first time that the Indian economy has seen a downturn in at least 40 years and is the first decline in GDP since the country began publishing quarterly growth figures in 1996.
India was completely closed by the end of March 2020, with the provision of all non-essential goods and services nearing a complete halt around April 2020 and May 2020.
Bloomberg predicted that Q1’s GDP would fall by 19.2%, though some economists had pointed out a slightly higher fall.
In the January-March quarter, the economy grew by 3.1% on a year-on-year – the lowest rate that the economy has witnessed in over 17 years – and 5.2% in the June 2019-20 quarter.
India’s GDP growth rate dropped from 6.1% in FY19 to 4.2 percent in FY20, being the slowest in the past 11 years.
According to government data, the country’s Gross Value Added (GVA) has fallen by 22.8%. Sectoral data showed that construction had decreased by 50.3%, production by 39.3%, and mining by 23%.
Gross Fixed Capital Formation (GFCF), a method to measure the investment rate, fell by 52.9%, electricity 7%, and construction activities 50.3%. Agriculture and related activities, at the same time, were bright, growing at 3.4% during the April-June quarter of 2021 FY.