India's Q2FY21 GDP contracts 7.5%, technical recession confirmed
Two weeks after a team of Reserve Bank of India (RBI) economists said India is in a technical recession, Gross Domestic Product (GDP) data released Friday officially confirmed the same. The GDP contracted 7.5 percent in the July-September quarter.
The GDP data released for the second quarter (Q2) today by National Statistical Office (NSO) showed that the Indian economy has contracted in two consecutive quarters -- called technical recession -- for the first time since 1996 when the country began recording quarterly growth rates.
In the April-June quarter, the Indian economy had contracted by a whopping 23.9 percent on the back of a strict coronavirus lockdown from the last week of March till early May. The RBI’s internal model anticipated a GDP contraction of 8.6 percent for the July-September quarter.
The economists had expected a contraction in the second quarter of the fiscal. They expect a milder contraction of 3 percent in the October-December quarter. The first expansion of the Indian economy by 0.5 percent is expected in the January-March quarter next year.
A milder GDP contraction in July-September compared to the April-June period has come on the back of a series of stimulus packages under the Atmanirbhar Bharat program.
Atmanirbhar Bharat 3.0 measures worth Rs 2.65 lakh crore were recently announced by Union Finance Minister Nirmala Sitharaman.
The focus of the stimulus packages has been on job creation and restarting different sectors of the economy. The government has announced measures of a total worth of almost 30 lakh crore or about 15 percent of the GDP.