As expected, Indian economy has fallen to a record low in the pandemic. On 31 May, the Centre announced that the GDP for the full financial year 2020-21 contracted by 7.3 percent as compared to the 4 percent growth that we had recorded in fiscal year 2019-20.
From the onset of the pandemic, India has shown an economic contraction for perhaps the first time in at least four decades. This is the worst dip that we're seeing since Independence.
But then again, since the country exited the “technical recession” that it had slipped into for the first two quarters of 2020-21, the numbers released by the National Statistical Office also show a revival ahead of the second wave of COVID.
While the economy grew by 0.4 percent in the October-December period of 2020, the expansion continued till Q4 where the GDP grew by 1.6 percent. This is the January-March period when most of the economy had opened up to near normalcy before shops and businesses were forced to shut down again due to state-imposed lockdowns in the second surge. Although it's a sign of revival, it's meagre growth.
But as we battle a second wave which may just derail this minor growth, while also expecting a third wave, what do these numbers tell us about future of the Indian economy? What are the main takeaways from this? And will the delay in vaccination impact the overall health of the economy?
In this episode, you'll hear from ICRA's Chief Economist Aditi Nayar and Pallavi Nahata, the Associate Editor for Economy at Bloomberg Quint.