Since Independence, India, for the first time is witnessing a technical recession. India showed a remarkable bounce back in the September quarter, much faster than the experts at the National Statistical Office expected.
India has reflected a promising GDP of 7.5% in July & September compared to 2019 in the same timeframe. In the first quarter of the 2020-21 fiscal year, i.e., April 2020 to March 2021, the GDP or the gross domestic product had tapered by 23.9 percent. The record was set as the lockdown thumped the economic activity.
Surprisingly, the manufacturing sector showed great recovery with a growth of 0.6 percent in the timeframe July-September after plummeting in the quarter before. The GDP has plummeted by 39 percent in the earlier quarter, leaving little hope of recovery. The GDP of 7.5 percent in the timeframe of July-September has shown a remarkable growth of 4.4 percent as compared to the same period, last year. The Reuters poll analysts had predicted an 8.8% for the same period. The promising growth in the farm sector escalating to 3.4%, and the manufacturing sector showing a rising 0.6% in the September quarter have given rise to a hopeful recovery especially, with the government ready to distribute Covid-19 vaccines to its citizens of 1.4 billion population.
The Ministry of Finance’s CEA, Krishnamurthy Subramanian, seemed exhilarated with the encouraging numbers of the Q2 and the V-shaped recovery in the farm and the manufacturing sectors. The economic recovery was due to the propel in the investment goods and consumer goods demand. He further said that the economy had provided optimism but, with due vigilance and caution during pandemics, it is in reasonably good shape. The financial and industrial experts are hopeful of further recuperation in the following months. Chandrajit Banerjee, the CII Director-General, expressed that the sharp bouncing back of the GDP in the second quarter with 7.5 percent as opposed to the decline of 23.5 percent in the last quarter, will increase the confidence on easing up of the lockdown restrictions. Sangita Reddy, the FICCI President, was equally upbeat on the recovery of the economy and its rise for the near future.