(Representative image)
NEW DELHI The gross domestic product or GDP data released on Friday showed that the economy slowed to 3.1 per cent in the January-March quarter, partly as a result of the Covid-19 clampdown.
India’s economic growth stood at 4.1 per cent (revised) in the October-December period (Q3) of 2019-20. The Q2 and Q1 numbers have also been revised to 4.4 per cent and 5.2 per cent respectively.
The GDP growth in 2019-20 (FY20) slowed apparently to an 11-year low of 4.2 per cent.
In another set of data released, eight core sector output contracted 38.1 per cent in April. The core industries comprise more than 40 per cent of the weight of items included in the index of industrial production (IIP).
Asia’s third-largest economy began slowing last year, but a countrywide lockdown to contain the coronavirus spread — imposed on March 25 — halted economic activity completely. Although, many restrictions were eased for manufacturing, transport and other services from May 18.
The full impact of the lockdown on manufacturing and services will become more apparent in the June quarter.
Economists expected that the fiscal year that began in April will see the worst economic contraction in at least four decades.
However, weather forecasts for normal monsoon rains are in farmers’ favour at least, giving a sign of hope that the rural sector can help support the millions of migrant workers who returned to their villages from cities when the lockdown began.
The count of coronavirus affected people in India has crossed 1,60,000-mark with more than 4,700 deaths, with an average daily jump of 6,000 cases in the last one week.
So far, the government’s stimulus package to deal with the coronavirus impact has largely focussed on subsidised credit to small businesses and farmers.
Earlier this month, the Reserve Bank of India (RBI) cut policy rates by 40 basis points (bps), and has reduced its key repo rate — rate at which the RBI lends money to banks — by 115 bps since February.
(With agency inputs)