But this is the worst performance on the GDP front for more than 40 years.
The reason is that for the financial year 2020-21, where the decline was estimated to be around 8%. At the same time, this figure has stopped at 7.3 percent. And in the fourth quarter of that year, ie between January to March, where there was a growth of 1.3%, there has been a growth of 1.6%.
Nevertheless, economists who keep an eye on the figures are breathing some peace.
After the tremendous decline in the first two quarters of the year, between the third quarter i.e. October to December, India’s GDP registered a slight increase.
This gain of 0.4% was not encouraging, but it certainly gave enough satisfaction that the third quarter in a row did not go into recession. Now this figure has been reduced to 0.5% in the revised estimate. That is, something better. And this was also the formal sign of the Indian economy recovering from the recession.
What were the knowledgeable assuming
Most experts expected that despite the onset of the second wave of Corona in February 2021, the economy would only see some improvement in the fourth quarter of the last financial year i.e. from January to March this year.
State Bank of India’s Nowcasting model, according to the mathematics that describes the present, rather than the prediction, should have shown a growth of 1.3% in GDP during this period.
Obviously the picture looks better. But some deep concerns are also hidden in these figures. Especially the growth rate seen in the fourth quarter is disturbing.
Remember that the lockdown in March last year was over in June and from July onwards, the work of unlocking or resuming business was going on. By December, almost everything had opened up.
The second wave of Corona was not even known and the situation had become normal. At least it was assumed that everything is fine. In such a situation, the growth of just 1.6% for that quarter shows that the economy is in critical condition.
Slight relief
On the other hand, just before the GDP figures came, the government also announced that in the year 2020-21, the fiscal deficit of the country, the deficit of the government treasury had been 9.3% of the GDP. While this was slightly lower than the 9.5% estimate given earlier, it is also a matter of slight relief.
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