• 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, as per estimates released by the National Statistical Office.
• The country has now entered a technical recession with two successive quarters of negative growth.
• 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.
• 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.
• Electricity, gas, water supply and other utility services also recorded 4.4% growth in the second quarter, recovering from a 7% contraction in Q1.
• But it remained a bleak quarter for several sectors, including mining, services such as retail trade and hotels, construction and financial services.
• While the 7.5% contraction in GDP came as a positive surprise, there are concerns about a decline in government spending and the worsening fate of two key sectors compared to the first quarter.
Mains Paper 3: Economy
Prelims level: Negative economic growth
Mains level: Indian economy growth and development