In this pandemic, the economy is facing a dreadful situation. After the unlock process economic activity was expected to recover slightly, but in the month of July-September quarter’s growth estimates are now being revised downwards with irregular localized lockdowns resulting in slack economic activity and low demand.
In the April-June quarter, the country’s GDP is estimated to have decreased by up to 20% on average, several economists estimating it between (-) 13.6 percent and (-) 25.5 percent. The nationwide outbreak of economic activities affected the GDP significantly. The economic activity was expected to become normal slightly with the unlock process, but the July-September quarter’s pandemic situation is continuing with the crucial stage so the economy revised downwards with intermittent localized lockdowns resulting in slack economic activity and weak demand.
Former Chief Statistician of India Pronab Sen put the degrowth estimated for April-June to be around (-) 20 percent, including it does now not capture the actual depth of the pandemic’s adverse effect on the MSME sector and agricultural incomes. Barclays has shown the economy decreased by 25.5 percent in April-June, while ICRA has projected a contraction of 25 percent. HDFC Bank has released a GDP decreased up to 21 percent, State Bank of India has shown at 16.5 percent go downward, while India Ratings has projected a contraction of 13.5 percent.
Quarterly GDP estimates are mostly linked to company results, which have reflected a better-than-expected status in the first quarter, along with a probable 3.5 percent-plus increase in the agricultural sector, Sen said. Also, the vital goods such as FMCG, pharmaceuticals persisted to be produced and supplied, with their contribution to manufacturing estimated to be roughly forty percent, HDFC Bank’s Chief Economist Abheek Barua said.
In GDP along with irregular lockdowns replicate in the increase estimates for the 2d quarter as well. Barua expects the economic system to contract 11 percent then, very worse than (-)7.5-(-)8.0 percent predicted earlier, with some states displaying activity nearer to the semi-normal stage like Haryana, Punjab, parts of Maharashtra, Gujarat, and different states like West Bengal, Karnataka, in part Tamil Nadu getting into semi-lockdown. Indian economic system is an integrated system with interlinked supply chains, so until you have a full unlocking in some sense you will never be able to get returned or come even remotely shut to the kind of GDP increase you noticed in the past.
