SME Times News Bureau | 13 Nov, 2020
India has technically entered into a recession with a likely contraction
in its GDP during the July-September period, according to a report by
the Reserve Bank of India (RBI).
RBI's Economic Activity Index
estimates that India's GDP growth for the second quarter of the current
financial year was negative and the GDP contracted by 8.6 per cent
during the quarter.
"India has entered into a technical recession
in the first half of 2020-21 for the first time in its history with
Q2:2020-21 likely to record the second successive quarter of GDP
contraction," it said.
The contraction is ebbing with gradual normalisation in activities and expected to be short-lived.
The
RBI report said that at a time when global economic activity is
besieged by the outbreak of the second wave of Covid-19, incoming data
for the month of October 2020 have brightened the near-term outlook for
the Indian economy and stirred up consumer and business confidence.
"Since
the assessment of the performance of the Indian economy in the first
half of 2020-21 that was presented in the Monetary Policy Report of
October 2020, several developments point to a window of respite opening
up and an unshackling of economic activity from the grip of Covid-19 as
the festival season sets in," it said.
