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India officially enters recession though GDP contraction shrinks
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SME Times News Bureau | 27 Nov, 2020
Even though India's economic recovery accelerated in Q2FY21 from the
lows of the pandemic-induced lockdown, the country for the very first
time since Independence entered into a technical recession.
The
National Statistical Office (NSO) data on Friday showed that the Q2FY21
GDP on a year-on-year basis contracted by (-) 7.5 per cent from (-) 23.9
per cent in the preceding quarter.
Though not comparable, the GDP had grown by 4.4 per cent in the corresponding quarter of FY2019-20.
In
financial parlance, an economy is said to have entered a technical
recession after it consistently remains in the negative output territory
for two subsequent quarters.
This trend underscores the
reduction in purchasing power along with lower tax collection for the
government, likely defaults on debt and falling Capex spends.
According
to the NSO, the GDP at 'Constant (2011-12) Prices' in Q2FY21 is
estimated at Rs 33.14 lakh crore as against Rs 35.84 lakh crore in
Q2FY20, showing a contraction of 7.5 per cent as compared to 4.4 per
cent growth in Q2FY21.
"Quarterly 'GVA at Basic Prices at
Constant (2011-12) Prices' for Q2 of 2020-21 is estimated at Rs 30.49
lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20, showing a
contraction of 7 per cent," the NSO said in the estimates of Q2FY21 GDP.
"With
a view to contain the spread of the Covid-19 pandemic, restrictions
were imposed on the economic activities not deemed essential during Q1.
Though the restrictions have been gradually lifted, there has been an
impact on the economic activities," it added.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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