Corona made India's slow growth rate worse

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New delhi date. May 30, 2020, Saturday

The effects of the Covid-19 epidemic and the onset of the lockdown on the Indian economy are beginning to show. During the fourth quarter (three months) of the current financial year, the country's growth rate has slowed to 3.1 compared to last year, which is the lowest level in 11 years. A nationwide lockdown was carried out during the last week of March to combat the Corona virus and economic activities were completely halted.

According to a report released by the Ministry of Statistics and Program Implementation, India's GDP for the three months to March is 3.1 per cent this year as against 5.7 per cent last year. The GDP growth rate for the third quarter from the first quarter of FY20 has also been revised. In terms of annual growth, the GDP growth rate for FY20 was about half that of FY17 (8.3 per cent). It was 5.7 percent in the fourth quarter of 2019 and has since fallen. The government had earlier projected a growth rate of 5 per cent for 2019-20 as against 6.1 per cent in 2018-19.

India's growth rate has been slow for the last two years and the Koro epidemic has exacerbated the situation and reduced consumer demand and private investment. The most significant decline in the year 2020 has been in Gross Fixed Capital Formation- GFCF and in 2019 it has gone up to 2.8 as compared to 9.8.

According to experts, the lockdown has led to a reduction in personal expenses. The weakening demand has reduced investment demand and also affected the corporate balance sheet. In the financial year 2021, government spending will again prove to be the engine of growth. Weak commodity prices and import demand can help the growth rate a little bit.

The worst affected states are Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, West Bengal, Rajasthan, Andhra Pradesh and Telangana. These eight states contribute 60 per cent to India's GDP and 58 per cent to the workforce.

According to a study, lockdown in Indian states has caused a loss of over Rs 30 lakh crore, or 13.5 per cent of the total GSDP. All the major districts of India which are in the Red and Orange Zones have suffered 90 per cent of the total damage. Maharashtra, Tamil Nadu and Gujarat, which have the highest number of corona cases, accounted for 15.6 per cent, 9.4 per cent and 8.6 per cent of the total losses, respectively.

According to former chief statistician Pranab Sen, he does not expect more than 3 per cent economic growth in the next two quarters (2020-21) and this has made it very difficult to achieve the નું 5 trillion economic target by 2024-25.

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