Today, we will talk about the ruckus in the GDP data in India and see what color the Indian economy will show in the coming months. You will remember that as the month of August passed, bad news was given. India’s GDP rate fell significantly compared to the previous quarter. 23.9% by statistics. The GDP number shows how much production was done in the country’s factories, services and farms throughout the year or in a quarter, and increased or decreased compared to the previous year or quarter.
After the arrival of GDP figures, many economists, academics, journalists writing on the economy and opposition politicians got a chance to target the central government. The hope of despair was that there was no hope left for now.
There is no denying that the figures of August 31 were showing the effects of the slowdown in the economy. And it was true but the truth is also that after the crisis of COVID, all the people were prone to such figures. That is, it was not surprising that due to the outbreak of the pandemic, in a country with 130 crore population, all the production, movement and purchase and sale will stop then the growth rate will fall.
It is also to be remembered that even before COVID the last quarter of the last financial year 2019-20, January to March 2020, the economy was looking tired. At that time, GDP had grown by only 3.1 % as compared to 5.7 % in the last quarter of 2018-19.
Let us tell you here that the financial year of India runs from April month of the year to March month of next year. There are four quarters in a financial year and GDP numbers come at the end of the year, every quarter also, but, they go a quarter behind. For example, we are now in the second quarter of the financial year, which will end at the end of September i.e. this month but the GDP figures which came on 31 August were from the last quarter i.e. the first quarter of the financial year 2020-21.
Lockdown 1 came into force on 24 March and unlock 1 started from 1 June. After the process of unlock started the Central Government and the State Governments gradually started allowing economic activities and this led to some movement in the economy. The month of June brought some hope.
But as the COVID spread its foot in July and August many state governments continued to lift the lockdown according to their discretion. This disrupted the pace of the economy because if you run anything that is stopped from the start-stop, then it is clear that it will take time to catch up.
Prof. Mayank Kumar Pandey