13:41 GMT01 August 2021
Listen Live
    Get short URL
    0 0 0

    On Wednesday, the Reserve Bank of India (RBI) said the country's economy is likely to contract 8.6 percent in the July-September period of the current financial year (April 2020 – March 2021), as per its estimates. India’s Gross Domestic Product (GDP) was 23.9 percent less in April – June of this year than during the same period last year.

    A day after the Reserve Bank of India (RBI) flagged recession concerns, Congress leader Rahul Gandhi hit out at Prime Minister Narendra Modi's handling of the economy.

    Pointing out the fact that India has entered into recession for the first time in history, in a Tweet attacking Prime Minister Modi on Thursday, Gandhi said, "Mr. Modi’s actions have turned India’s strength into its weakness."

    The claim made by Gandhi, however, is not new, as various global financial agencies as well as the RBI have projected negative growth for India for the entire financial year due to Covid-related disruptions.

    In the Indian government accounting system, the financial year begins in April.

    Even though the RBI has estimated in its recent report released on Wednesday that the Indian GDP may see a contraction of 8 percent in July – September, it earlier said that a contraction of 9.5 percent is expected in the current financial year.

    While announcing the key lending rates on 9 October, RBI Governor Shaktikanta Das said, “For the year 2020-21 as a whole, real GDP is expected to decline by 9.5 percent, with risks tilted to the downside. If, however, the current momentum of upturn gains ground, a faster and stronger rebound is eminently feasible."

    RBI maintained that GDP growth may "break out of contraction and turn positive" in January-March 2021, essentially meaning that India’s economic contraction will continue till December this year.

    Other agencies have also predicted an economic contraction in the current financial year.

    The World Bank has said that India’s GDP is expected to contract by 9.6% in the current financial year. Goldman Sachs has said India's economy would shrink by 14.8 percent, while India Ratings maintained that the economy would contract 11.80 percent.   


    Challenges Continue for India’s Economy with No Sure-Shot Vaccine in Sight, Finance Minister Says
    India’s Economy Set to Contract by 9.6% in 2020-21, says World Bank, Hinting at Worse Time Ahead
    Government Working on Next COVID-Stimulus to Support Economy - India's Economic Affairs Secretary
    India, Indian National Congress, Rahul Gandhi, Narendra Modi, Economy, Recession, economic slowdown
    Community standardsDiscussion