What’s in the news?
- According to the latest GDP estimates released by the National Statistical Office (NSO), India’s economy resurfaced to growth territory in the third quarter of fiscal year (FY) 2020-21 (October-to-December), clocking a 0.4% rise in the gross domestic product (GDP).
- GDP had shrunk in the first two quarters by 24.4% and 7.3% as per revised data, amid the COVID-19 pandemic and lockdowns, marking a technical recession.
- The NSO has also revised its advance national income estimates for FY21 to project an 8% decline in GDP, compared with the 4% growth seen in FY20. The NSO had earlier estimated a 7.7% shrinkage for FY21.
What is a technical recession?
- 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.
- The National Statistical Office is the Statistics Wing of the Ministry of Statistics and Programme Implementation.
- In 2019, the central government merged the Central Statistical Organisation (CSO) and National Sample Survey Organisation (NSSO) into the National Statistical Organisation.
- NSO is mandated with the following responsibilities:-
- acts as the nodal agency for planned development of the statistical system in the country
- compiles and releases the Index of Industrial Production (IIP) every month and conducts the Annual Survey of Industries (ASI);
- organizes and conducts periodic all-India Economic Censuses
- prepares national accounts as well as publishes annual estimates of national product, government and private consumption expenditure, capital formation, savings, etc. as also the state level gross capital formation of supra-regional sectors and prepares comparable estimates of State Domestic Product (SDP) at current prices;