India stares at the fifth recession

Due to Covid-19 Pandemic the Central lockdown has been implemented for the entire country and now it is pulling down the economic life of the country. The current recession staring at India brings a new set of challenges. The crisis has emerged out of the blue as the country is in a lockdown, severely hampering economic activity.

Daily Current Affairs Quiz 2020

           For India this is estimated to be the worst ever contraction of GDP growth. RBI in its MPC meet acknowledged that this year’s GDP will be in negative territory but refrained from giving any numbers. However other agencies predict a sharp contraction in the range of 5%-6.8% in FY21, with the bulk of the fall estimated to be in Q1 of FY21 when quarterly GDP may contract by nearly half.

Key-Points:

Recession is generally defined as a fall in the overall economic activity for two consecutive quarters (six months) accompanied by a decline in income, sales and employment.

In independent India’s history, four such years of negative GDP growth were registered. They saw contraction of -1.2% (FY58), -3.66% (FY66), -0.32% (FY73) and -5.2% (FY80).

The recession looming now is different from previous recessions as it comes with a fresh set of challenges.