The Indian economy shrank drastically in the first quarter of 2020 amid the coronavirus as the Reserve Bank of India (RBI) in its latest publication released high-frequency data.
According to the report, “India has entered a technical recession in the first half of 2020-21 for the first time in its history.” Gross Domestic Product GDP contracted 8.6% in the quarter ended in September.
As per the report, “There is a grave risk of generalization of price pressures, unanchoring of inflation expectations feeding into a loss of credibility in policy interventions.”
In addition to this, the introductory estimates presented in the central bank’s report showed a spike in household financial savings to 21.4% of GDP in April-June, up from 7.9% in the same period a year ago and 10% in January-March. The bulk of these savings are bank deposits.
Rahul Gandhi’s Reaction
Member of the Indian National Congress Rahul Gandhi while criticizing the Modi administration for failed policies about the economy, said India has entered into recession for the first time in history. Mr Modi’s actions have turned India’s strength into its weakness.
India has entered into recession for the first time in history.
Mr Modi’s actions have turned India’s strength into its weakness. pic.twitter.com/Y10gzUCzMO
— Rahul Gandhi (@RahulGandhi) November 12, 2020
Coronavirus in India
India has become the country with the second-most coronavirus cases around the world. India has recorded more than 8 million cases of coronavirus, and more than 120,000 deaths.
The total active cases now stand at 4,89,294 following a decrease of 5,363 in the past 24 hours. Moreover, the Indian Council of Medical Research said that a total of 12,19,62,509 samples have been tested for coronavirus up to 11 November.
Of these, 11,93,358 samples were tested on Wednesday, the Indian Council of Medical Research (ICMR) said.
Over the significant rise in the cases, the Indian Prime Minister Narendra Modi discussed the current situation with the World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus.