With the Indian economy having contracted in two successive quarters of June and September 2020, India had entered into what is called technical recession i.e. decline in real GDP for 2 consecutive quarters. To us, with Indias GDP growth rate falling year after year since 2016, the economy was anyway slowing down towards a protracted recessionary phase. After all while the real GDP may not have declined between 2016 to 2020, the real GDP growth rate did decline quarter after quarter and thats the reality that we confront in our daily economics and livelihood. The contraction of the economy in Q1 and Q2 was shortlived, being due to the covid lockdown, but this year to year slowdown of the economy had been due to worrisome long term structural deficiencies, which need a resolution.
With the economy still being shaky and uncertain, it was a relieved government that announced that as per the latest NSO statistics, the economy witnessed positive growth of 0.4% in Q3 of December 2020 and thus India was out of the technical recession. The Government as expected, reiterated its claims of a V shaped recovery. While many would doubt the veracity of this claim of hitting positive growth however negligible/minor to be, the likes of Dr. Subramanian Swamy challenged it saying that if a guestimate of the negative growth in the informal and the MSME sectors is added, as per the Paasche and Laspeyres Indices, it would be a negative growth rate of 10% and not + 0.4%, as is claimed by the government.
If you go by the ground reality experienced by the common businessman, things have not changed in the manner the government claim. In this episode of the Business tit-bits our Business Editor Mr Akhilesh Bhargava shares his take on the matter.
#GDP #IndiaEconomy #Recovery #Growth
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