‘Hope GDP returns to positive territory in next quarter,’ says Amit Shah
India’s economy entered into technical recession for the first time ever after GDP in the second quarter contracted by 7.5%.
Union Home Minister Amit Shah on Monday said that he hopes the country’s gross domestic product will enter the positive territory in the next quarter, PTI reported. Last week, India’s economy entered a phase of technical recession for the first time ever, as GDP growth rate contracted by 7.5% in the second quarter (July-September). In the first quarter (April-June) of this financial year, the economy had contracted by an unprecedented 23.9%.
In a virtual meeting with media persons on Monday, Shah said that the prime minister used the pandemic period to “visualise policy-making, keeping in mind its long-term impact on the economy”. He also mentioned the measures announced by the government, which it claimed amounted to an economic package of Rs 20 lakh crore.
“In terms of the recent GDP figure, we are only 6% behind...and I hope that in the next quarter, the GDP will be in positive,” Shah said, according to PTI. It, was however not clear which data he referred to, while citing the figure of “6%”.
The second quarter GDP numbers, despite being in the negative, are higher than the Reserve Bank of India’s estimation, made earlier this month. The central bank in a bulletin had predicted that the growth rate will contract by 8.6% in the second quarter.
Chief Economic Adviser KV Subramanian termed the slower-than-expected contraction as an “encouraging sign” and said that there was an “upside potential” to the GDP estimates if the country does not go through a second wave of Covid-19, reported the Financial Express.
The Indian economy, which was already slowing down before the onset of the coronavirus pandemic, dipped to all-time lows in terms of GDP numbers in the first quarter, with economic activities stalled due to the nationwide lockdown imposed in March. Various financial institutions have predicted that India will register a negative growth rate in the full financial year 2020-’21.