Indian economy contracts 23.9%

Indian economy contracts 23.9%

Under the impact of Covid-19, the Indian economy contracted by 23.9% in the first quarter (April-May-June) of this financial year. Every sector except agriculture suffered a big decline, and the economy fell further than forecast. This is the first time the Indian economy has recorded such a large fall since quarterly GDP figures began to be published in 1996.

The declines were: manufacturing 39.3%, construction 50.3%, mining 23.3%, electricity and gas 7%, services 5.3%. Only agriculture grew, by 3.4%. A State Bank of India study says the country's economy will contract by at least 10.9% over the 2020-21 financial year as a whole.

The collapse of the Indian economy began in earnest with demonetisation in November 2016, and the GST implemented afterwards made matters worse. While the Modi government helped the monopolies by cutting their taxes and writing off their loans, it did nothing to raise the incomes of ordinary people and workers, and even destroyed existing jobs. As a result, consumption fell steeply. Add a lockdown imposed suddenly and unscientifically without any preparation, and the Indian economy nosedived. India faces an economic collapse on a scale many other countries have not. And the spread of Covid-19 is still continuing at its most intense.