The fall of 23.9% of Indian GDP

                               

What is GDP?

GDP stands for Gross Domestic Product which is equal to the total amount spent for the the final goods and services in a specific period of time.

The fall of 23.9% in Indian GDP

The National Statistical Office(NSO) has recently released the data of India's GDP for the first quarter. India's GDP has shown a huge contraction of 23.9%. As per the experts, this is the worst contraction India has seen in the past decades. The effect of lockdown due to COVID-19 pandemic can be seen in the numbers shared by NSO.

As per the experts, the annual GDP of India will also remain negative as the GDP of few upcoming quarters has also been predicted as negative.

The only sector which has shown a slight growth of 3.4% during the lockdown is the Agriculture. The sectors which have been hit massively due to COVID-19 lockdown are manufacturing, construction, tourism, and transportation.

Along with the above-mentioned sectors, the pandemic has also hit the consumption side of the Indian economy. There was a rise in the demand of essential items during lockdown however, there was a decline in the demand of non-essential items.

What is the reason of decline apart from COVID-19?

The policies of the Indian government are majorly designed to focus on the supply side. During lockdown, Indian government has paid attention to boost the demand side which led to the fall of the tax revenue of the government. 

The fall of Indian GDP is one of the worst contraction in comparison to the GDP of the other countries.

Conclusion

One of the major keys to reviving the economy is to spend the money on reviving demand. The countries which have spent more on reviving the demand have done exceptionally good in comparison to the ones which have only focused on the supply side.