Due to the ongoing pandemic situations and the month-long lockdown periods, the Indian economy has suffered a lot. From losing jobs to losses in business, India has seen a steep fall in monetary transactions. But we are optimistic as we see positive growth in the GDP rate by the end of the year. Experts say, maybe we are out of the “worst” situation.
Factors that affected the economy
Even in the September quarter, the Indian economy faced a massive blow as it contracted almost 7.5%, making way for a recession period. When a country faces a contraction in the GDP rate for two successive fiscal quarters, technically it enters into a recession. The factors that affected the economy are surely the covid 19 pandemic and the lockdown period that followed. With losing so many jobs to the closing of so many businesses across the nation, India would not expect anything but a blow to the economy rate. This is the first time that India faced two successive contractions in the GDP rate since 1996 when it started publishing the GDP data publicly.
The silver lining at the end of the year
Though the situation is worsening, we still see hope as the economy shows a boost by the end of the year. The declining pace narrowed a little and hopes are high that it will bounce back to positive growth in the next fiscal quarter. All thanks to the automotive sales and the farm sector boosting during the pandemic that brought this positive change in the Indian economy. Our PM Narendra Modi Ji promised that India would again be one of the top developing nations and see economic growth by the year 2023. We can only hope this comes true.
Worst might be over
“Expectedly, the worst for the economy is over. That said, the economy is still not out of the woods and the improvement in activity from here onward would likely be labored,” said an Indian economist Kunal Kundu. He further added, “But with signs of emerging fatigue in recent demand uptick and the second wave of infections already impacting economic activity, we would retain our view of FY21 real GDP contracting by 8.6%, given the likelihood of a much weaker third-quarter activity”. Thus, this has instilled faith in people across the nation that the worst might be over and we may see better economic growth in the years to come.
The Policy Times suggestion
- It is good of the government to have lifted the lockdown after 7-8 months. If not, it would have affected the Indian economy more adversely. The growth in the GDP rate by the end of the year brings hope to the entire nation.
- The governing authorities must impact more on boosting the economy by making policies that would include the growth of the agricultural sectors, rural development, and also emphasize more on small and medium businesses. This can definitely add to the growth rate immensely.