India’s economy was slowly picking up during the start of this year as the economy started to move north out of the recession it suffered in 2020. But an uncontrollable surge in Covid-19 cases halted the acceleration of the economy.
India is Asia’s third-biggest economy with a rise in the gross domestic product of 1.6% in the January-March quarter, compared with the same period a year earlier, according to official statistics published on Monday. This is faster than the 0.5% growth reported in the previous quarter.
The stronger performance wasn’t enough to prevent the economy from reducing by 7.3% for India’s fiscal year as a whole, which ended in March.
Indi’s economy started to slow down in the second quarter of this year with Covid-19 cases sweeping the entire nation. States like Maharashtra, Delhi, UP etc. faced a complete lockdown, while other states faced partial to complete lockdowns restricting business activities and travel.
While those measures helped control the spread of the virus, maintaining a declining trend with 1.27 lakh Covid-19 cases in the last 24 hours. Those who are majorly affected by the lockdown are the country’s poorest and most vulnerable that were stranded without income for weeks, leaving deep scars on the economy. They need their daily/monthly income to sustain their lives.
With the second wave of the pandemic arriving in the country, India recorded a staggering toll of death rates due to the deadly virus. After so much pressure and thought it took a while for Prime Minister Narendra Modi to impose a lockdown, predicting another economic slump even as the infection rate continued to spiral.
Unemployment has soared above 10% in May according to the center from Monitoring Indian Economy.
“India is projected to be the fastest-growing G20 economy in 2021 — but also the one which is the furthest away from its pre-crisis GDP trend,” the OECD said, adding that a “marked slowdown may have taken place in the April-June quarter, although the overall annual impact is likely to be muted.”