Indian economy contracts by 7.5% in Q2

As per estimates released by the National Statistical Office, India’s Gross Domestic Product (GDP) contracted 7.5% in the second quarter of 2020-21, following the record 23.9% decline recorded in the first quarter.
The country has now entered a technical recession with two successive quarters of negative growth.
However, the economy’s performance between July and September when lockdown restrictions were eased is better than most rating agencies and analysts anticipated. While most had estimated a contraction of around 10%, the Reserve Bank of India had projected a 8.6% decline in the second quarter.

Agriculture, which was the only sector to record growth between April and June this year, grew at the same pace of 3.4% in the second quarter, while manufacturing gross value-added (GVA) staged a sharp recovery to record 0.6% growth between July and September after collapsing 39.3% in the first quarter.
Trade, hotels, transport, communication and services related to broadcasting shrank 15.6% in Q2, after a massive 47% contraction in Q1.
The recovery is expected to continue in Q3 as the government lifts curbs on most economic activities that were imposed in March.
India’s growth is still lagging behind other major Asian economies such as China, which expanded 4.9% in the September quarter; Japan, which grew 5%; and Singapore, which contracted 5.8%.

A technical recession is a term used to describe two consecutive quarters of decline in output. In the case of a nation’s economy, the term usually refers to back-to-back contractions in real GDP.
The most significant difference between a ‘technical recession’ and a ‘recession’ is that while the former term is mainly used to capture the trend in GDP, the latter expression encompasses an appreciably more broad-based decline in economic activity that covers several economic variables including employment, household and corporate incomes and sales at businesses.
Another key feature of a technical recession is that it is most often caused by a one-off event (in this case, the COVID-19 pandemic and the lockdowns imposed to combat it) and is generally shorter in duration.

Today Current Affairs Upsc Exam Syllabus & Previous Yearpaper.