India registers a sharp recovery, economic contraction at 7.5 per cent in Q2

India recorded a 7.5 per cent contraction in the July-September quarter of the current financial year, signaling a sharp recovery in economic activities after registering a 23.9 per cent decline in the first quarter. In the corresponding period of the previous financial year, India had registered a growth rate of 5.2 per cent.

For the first half of the current financial year, India’s GDP growth contracted by 13.3 per cent, according to data released by the Ministry of Statistics and Programme Implementation (Mospi).

With GDP growth contracting for two consecutive quarters in the current financial year, India has officially hit recession.

India announced a stringent lockdown on March 25 to contain the spread of the coronavirus pandemic. Economic activities gradually opened up from May-end but several sectors remained under stress.

Drop in the construction sector in the second quarter stood at 8.6 per cent, a huge improvement after shrinking 50.3 per cent in the April-to-June quarter in the current fiscal year. The manufacturing sector, which is critical for employment, too registered a significant uptake. It contracted by 0.6 per cent in the second quarter after posting a decline of 39.3 per cent in Q1. Similarly, the mining sector narrowed the contraction of 23.3 per cent registered in the April-to-June quarter to 9.1 per cent in the second quarter. The agriculture sector registered a growth of 3.4 per cent in the second quarter.

Earlier in the month, Finance Minister Nirmala Sitharaman had announced a fresh package under the Atmanirbhar 3.0 programme with a focus on jobs and stressed sectors, including the micro small and medium enterprises, agriculture and real estate. The total stimulus package fleshed out by the government and the Reserve Bank of India stands at Rs 29.87 lakh crore, which is 15 per cent of the GDP..