India’s GDP falls 23.9% in first quarter: NSO data

India’s GDP falls 23.9% in first quarter: NSO data

Part of: GS-Prelims and GS-III – Economy

In News:

• As per National Statistical Office (NSO), April-June 2020-21 Quarter GDP growth at constant prices (Real GDP) is -23.9%. 
• It was measured from the same quarter previous year 2019-20. 

Key takeaways 

• All the sectors have shown negative growth except agriculture where the growth was 3.4%.  
• India will face negative growth in the present quarter (July to Sept) also measured from July-Sept 2019-20. 
• As we all know that the Demand of GDP in the economy comes from four sectors: Household (Consumption – C), Private Sector (Investment – I), Government (Consumption + Investment represented by G), Export – Import (X-M)
• In the Present Scenario, recession has been triggered because due to Lockdown, production was stopped then people lost jobs and their (consumer) demand decreased.
• Then, the businessmen reduced production and their demand for capital goods/raw material/ intermediate goods decreased.

Do you know? 

• Once a country faces two consecutive quarters of negative real growth (measured from the same quarter previous year), then it is declared recession.
• India is also expected to see a full year contraction in real GDP in the present year by around 5%.
• India till now has faced recession four times in 1957-58 (-1.2% – drought), 1965-66 (-3.66% – drought), 1972-73 (-0.32% – Oil crisis) and 1979-80 (-5.2% – oil crisis/drought).