{"id":12911,"date":"2021-06-30T01:01:00","date_gmt":"2021-06-30T00:01:00","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=12911"},"modified":"2022-05-12T17:58:42","modified_gmt":"2022-05-12T16:58:42","slug":"how-has-covid-19-affected-indias-economy","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/how-has-covid-19-affected-indias-economy","title":{"rendered":"How has Covid-19 affected India\u2019s economy?"},"content":{"rendered":"\n

From April to June 2020, India\u2019s GDP dropped by a massive 24.4%. According to the latest national income estimates<\/a>, in the second quarter of the 2020\/21 financial year (July to September 2020), the economy contracted by a further 7.4%. The recovery in the third and fourth quarters (October 2020 to March 2021) was still weak, with GDP rising 0.5% and 1.6%, respectively. This means that the overall rate of contraction in India was (in real terms) 7.3% for the whole 2020\/21 financial year.<\/p>\n\n\n\n

In the post-independence period, India's national income has declined only four times before 2020 \u2013 in 1958, 1966, 1973 and 1980 \u2013 with the largest drop being in 1980 (5.2%). This means that 2020\/21 is the worst year in terms of economic contraction in the country\u2019s history, and much worse than the overall contraction in the world (Figure 1).<\/p>\n\n\n\n

The decline is solely<\/a> responsible for reversing the trend in global inequality, which had been falling but has now started to rise again after three decades (Deaton, 2021<\/a>; Ferreira, 2021<\/a>).<\/p>\n\n\n\n

Figure 1: Economic contraction in India and the world during Covid-19<\/h4>\n\n\n
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