Gross value added (GVA) for the country declined by 22.8 per cent, manufacturing
by 39.3 per cent, and mining by 23.3 per cent. Gross fixed capital formation (GFCF) contracted 52.9%, electricity 7 per cent, and construction activities 50.3 per cent. Agriculture and allied activities, meanwhile, were a bright spot, growing 3.4 per cent during the quarter.
India is not alone in reporting dismal GDP numbers
. Even as China managed to buck the trend and, in fact, see an expansion of 3.20 per cent during the April-June quarter, the UK’s economy shrank 21.7 per cent, Germany’s by 10.10 per cent, and the US’ by 9.10 per cent.
The official figures were broadly in line with estimates by various agencies, all of which had forecast a decline in GDP during the quarter, though they had different in the extent of drop
— from 15 per cent to 35 per cent.
Former chief statistician Pronab Sen had projected a GDP contraction of 25 per cent to 35 per cent but cautioned that the NSO might come up with a much lower contraction
(15-16 per cent) because corporate data would be used as proxy for the informal sector.
ICRA Principal Economist Aditi Nayar, who had estimated a 25 per cent fall, had said: “We caution that the divergence in the performance of the formal and informal sectors might not get fully represented in the GDP data, given the lack of adequate proxies for the latter.”
Economists surveyed by Bloomberg
as of Friday had estimated a 19.2 per cent GDP decline in the quarter. Bloomberg
had quoted HSBC Holdings Plc Chief India Economist Pranjul Bhandari as saying: “The statistics office could announce GDP contraction of 17.5% year-on-year, which could subsequently be revised to a 25 per cent contraction when the informal sector survey is available.”
The lockdown and the gradual unlock in several states contributed to a sharp 40.7 per cent year-on-year contraction in manufacturing
volumes, according to ICRA’s Nayar.
India Ratings had projected a 17.03 per cent fall. “Business disruption from March to May has been so severe for production, supply/trade, and activities, especially in sectors like aviation, tourism, hotels and hospitality, that FY21 GDP growth
is expected to contract for the first time since FY80,” said India Ratings Chief Economist Devendra Pant.
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