Expect GDP to be positive from 3rd quarter onwards; Indian GDP falls less in July-September than other countries
In view of the spurt in economic activity during the last two months, a positive increase in GDP is expected in the third quarter of the current financial year 2020-21. At the same time, the growth rate of the last quarter (January-March) of the current financial year is definitely being claimed. According to the report of SBI EcoRap, India’s performance in July-September economic growth compared to other countries did better.
India’s gross domestic product (GDP) declined by 7.5 percent in July-September compared to the same period last year. At the same time, in July-September this year, the average economic growth rate of 48 countries of the world was 12.9 percent. India’s GDP declined by 23.9 percent in the first quarter (April-June) of the current financial year, while the average decline of GDP of 48 countries was just 5.6 percent during this period. That is, the Indian economy is recovering faster than other countries.
According to SBI EcoRAP, the GDP growth rate has also increased globally in July-September. In April-June this year, the economy of 27 countries had declined by more than 20 percent. At the same time, in July-September, the growth rate of only 3 countries declined by more than 20 percent. The report said that given the current trend, there may be a slight or moderately positive growth in the third quarter, but there will certainly be a positive growth in the Indian growth rate in January-March. However, the report also said that the growth rate will definitely remain in the negative zone for the entire financial year.
Service sector too close to reach pre-Corona level
The service sector, which contributes more than 50 percent to Indian GDP, is also close to reaching the pre-Corona level. In the second quarter (July-September) of the current financial year, the service sector stood at 17.19 lakh crore in GDP. The contribution of the service sector to the GDP of the third quarter of the last fiscal year 2019-20 was 17.35 lakh crore. That is, the service sector is just 16 thousand crore behind as compared to the third quarter of last year.
According to GDP figures, the service sector is getting better than before. In the first quarter of the current financial year, the service sector declined by 20.6 percent. In the second quarter, the decline was reduced to 11.4 percent. In the first quarter of the current financial year, services sectors like hotels, transport, tourism, communications declined by 47 percent. In the second quarter, the decline was 15.6 percent.
