Below is the Perspective on the expectation from GDP numbers by Dr. Joseph Thomas, Head of Research - Emkay Wealth Management
The GDP growth in India has been close to the 4 % level in the last two quarters of the last financial year, mainly on account of the economic sluggishness which the economy entered into earlier on in the last financial year. Some measures were taken by the government and the RBI to redeem the situation, but they were sadly far from adequate for an economy that was precariously poised to slow down further for want of sufficient credit and aggregate demand. On top of this, the pandemic dealt a severe body blow to the economy consequent to the national lockdown, and the widespread wage cuts and job losses both in the formal sector and the unorganized sector. A number of fiscal and monetary measures, initiated by the government and the RBI, focussed more on the supply-side, and much less on the demand side, as a means of propelling the sagging demand and falling employment levels. The lockdown actually started in the last week of March, and therefore, the GDP number may not reflect the actual ground reality currently prevailing and the full impact of the lockdown on the main sectors of the economy. The rate of growth for the last quarter may still be in the lower single digit, while the numbers for the current quarter may reflect the actual distress in the economy.
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