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Q1 GDP data released today: Key things to note

This is the first instance of an economic contraction for the country in at least four decades, and also the first GDP decline since India began publishing quarterly numbers in 1996

Topics
GDP | GDP data | Indian Economy

Sukanya Roy  |  New Delhi 

With the coronavirus-induced nationwide lockdown having deeply impacted the economy, India’s contracted 23.9 per cent in the April-June quarter of 2020-21 compared to the same quarter last financial year, showed official data released by the National Statistics Office (NSO) on Monday. Well, the pandemic has weakened the already declining consumer demand and private investment. These figures reveal the pain the economy had to undergo as Covid-19 brought all activity to a standstill during the quarter.

Why is the number important?

is a key indicator of overall economic activity. A sharp fall in growth means slowing business activity, rising unemployment and, consequently, greater stress on the banking sector. The GDP figures are keenly watched every quarter for cues on broader economic performance.

This is the first instance of an economic contraction for the country in at least four decades, and also the first GDP decline since India began publishing quarterly numbers in 1996. In the January-March quarter of this year, the economy had grown by 3.1 per cent year-on-year — the lowest rate in over 17 years — and by 5.2 per cent in the June quarter of 2019-20. The rate of India's GDP growth had declined from 6.1 per cent in FY19 to 4.2 per cent in FY20, the slowest in 11 years.

Meanwhile, After an initial burst on Monday morning that took the S&P BSE Sensex to the day’s high of 40,010.17, the markets lost ground as trade progressed. The S&P BSE Sensex lost over 1,614 points from the day's high and hit a low of 38,395.89 levels. It, however, recouped some of the loss and closed 839 points, or 2.1 per cent, lower at 38,628 levels.

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First Published: Mon, August 31 2020. 19:00 IST
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