India is facing Technical Recession, as the RBI confirms GDP contracts by 7.5%

During July-September, India’s GDP has contracted by 7.5%.

Two weeks after the Reserve Bank of India (RBI) said India was facing a crisis of technological decline, Gross Domestic Product (GDP) data released on Friday confirmed that GDP came down by 7.5 percent in the July-September 2020-21 quarter.

Official GDP data released in the second quarter (Q2) today by the National Statistical Office (NSO) showed that the Indian economy has entered into an agreement in two consecutive areas - the so-called economic recession - for the first time since 1996, when the country begins recording quarterly growth rates.

GDP by the average prices (2011-12) for Q2FY21 estimated at Rs 33.14 lakh crore, compared to Rs 35.84 lakh crore in Q2 for 2019-20, showing a 7.5 percent discount, according to official data -NSO."Quarterly GVA for Constant (2011-12) Q2 prices for 2020-21 are estimated at Rs 30.49 lakh crore, compared to Rs 32.78 lakh crore in Q2 for 2019-20, which shows a percentage reduction 7, "he added.Commenting on the Q2 GDP data, Chief Economic Advisor K Subramanian said, "Our economy is doing well. Our economy was doing well before the epidemic hit us. The epidemic hit us in March and the reason for Q1 GDP was 23.9% . "

Commenting on Q2 GDP data, Sreejith Balasubramanian, Economist - Fund Management, IDFC AMC, said, "India's actual Q2 FY21 agreement of 7.5% y / y was in line with our forecast and the latest developments in economic data.""As expected, industrial growth was strong as the number of students changed for the better, along with agriculture, but services (including public administration in line with the annual decline in Q2) and construction growth were negative," he added.However, he said earlier economic data would be important to measure the value of the 'froth' in Q2 data from overhead painting, ceremonies and restitution as well as putting more light on employment and wages.“The rate of reduction in Q2 by companies to improve profits is going up, the rate of domestic Covid infection in the next few weeks, the situation in our major export markets and policy support where it could all be. The most important thing is to see how the recovery leg ends up flat and then that will have the potential for medium term growth, ” added Balasubramanian.

In the April-June period, the Indian economy had contracted 23.9 percent after a strong coronavirus closure from last week of March to early May. The RBI's internal model expects GDP growth of 8.6 percent in the July-September quarter.Economists had previously been expecting a contract in the second quarter. They also expect a slight reduction of 3 percent in the October-December quarter. India's first 0.5 percent economic growth is expected in the January-March quarter next year.The declining GDP agreement for July-September compared to the April-June period has come after a series of renewal packages under the Atmanirbhar Bharat program.Atmanirbhar Bharat 3.0 measures worth Rs 2.65 lakhs were recently announced by Union Finance Minister Nirmala Sitharaman. Incentive packages are mainly focused on job creation and re-economic diversification. The government has announced measures for a total value of about 30 lakh crore or about 15 percent of GDP.