Economy Contracts By Record 7.3% For Year, Q4 Showed Revival Economy Contracts By Record 7.3% For Year, Q4 Showed Revival Gross domestic product grew 1.6 per cent in January-March compared with the same period a year earlier, data from the statistics ministry showed on Monday.
People walk at a crowded market amid the spread of coronavirus in Delhi. (FILE)
New Delhi:
India s annual economic growth rate picked up in January-March compared with the previous three months, but economists are increasingly pessimistic about this quarter after a huge second wave of COVID-19 infections hit the country last month.
A slow vaccination drive and local restrictions after a massive second wave of infections and deaths across the country have hit economic activities like retail, transport and construction while putting millions out of work.
Read more about India s GDP grows 1.6% in fourth quarter, contracts 7.3% in FY21 on Business Standard. This is the first full-year contraction in the Indian economy in the last four decades since 1979-80, when GDP had shrunk by 5.2 per cent
“We peg the GDP growth for the just-concluded quarter at 2%, suggesting that the double-dip recession implied for Q4 FY2021 by the NSOs second advance estimates for FY2021, was averted,” said Aditi Nayar, chief economist at ICRA. GDP grew 0.4% in the December quarter.
Experts suggest fiscal measures to boost demand amid pandemic
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This targeting spending is also required for contact-based services that have borne the brunt of the pandemic since last year, economists said even as they acknowledged limited fiscal space for the government.
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Fiscal measures such as direct cash transfers, enhanced allocation under rural job guarantee scheme, free foodgrain distribution, modest cuts in excise duty on fuels, and expedited vaccination are crucial to overcome the second wave of Covid-19, top economists have said.
It is crucial to support rural and urban demand because the economic impact of the pandemic this time will be more on demand impulse than on supply-side disruptions amid an intensification of infections in rural areas, they said.