(Juhi Aishwary, Intern Journalist): The coronavirus can have a huge impact on the country’s economy. From the figures released by the government on Friday for the last quarter of the last financial year and the whole year, it is clear that we have entered the Covid-19 era with a very weak economy. The growth rate of GDP in the quarter of January-March 2020 is just 3.1 percent and the rate of economic growth during the whole financial year 2019-20 is 4.2 percent. A growth rate of 6.1 was achieved in its last financial year (2018–19). This rate of economic growth is the lowest level in the last 11 years.
Statistics also show that the economic growth rate has been declining for the last eight quarters and it is expected to go down further in the April-June quarter and 2020-21. This situation can not only overcome the dream of becoming a five trillion dollar economy by 2025 but will also shock efforts to eradicate poverty and unemployment from the country.
According to the data released by the central government in the last quarter (January – March) of 2019-20, agriculture, mining and government administration, and allied services apart from any other sector (manufacturing, construction, electricity, gas, water supply, financial services, Etc.)] has not improved.
The manufacturing sector declined by 1.4 percent as compared to a growth of 2.1 percent in the same period last year. The large-scale construction sector saw a decline of 2.2 percent, compared to an increase of six percent in the same period last year. In the service sector, the growth rate of services like hotels, restaurants, transport, and communication has fallen from 6.9 percent to 2.6 percent. The growth rate of the financial services sector has come down from 8.7 percent to 2.4 percent. The above four sectors generate maximum employment opportunities. Their share in the entire economy is also increasing continuously.
The only better situation has been agriculture, whose growth rate has improved from 1.6 percent recorded in January-March, 2019 to 5.9 percent in January-March 2020. Along with the release of these figures, it has also been told that due to Covid-19 all the data has not been collected yet, so it will be further revised.
The efforts of the government did not show the effect
This report on the direction and condition of the economy raises some serious questions about the current economic policy. For example, for 2019-20, the government and RBI had targeted to achieve a growth rate of seven percent. In September 2019, two months after presenting the full budget in July 2019, the Finance Minister made several announcements to overcome the recession. The historic step of reducing corporate tax was also taken and GST rates were reduced on hundreds of products. A huge investment was announced in the infrastructure sector. Despite this, the decline in the quarterly growth rate suggests that these steps did not have much effect. There are already questions on how the government is collecting the data of the economy.
Crisis ahead and bigger
Now that most of the economy has been closed for almost two months due to Covid-19, the economy may slow down further. No government agency has set a target of economic growth for 2020-21 yet. While presenting the budget, the Finance Minister had talked about the nominal growth rate of 10 percent, which can be called a big target in the current situation because according to the data released on Friday, it is just 6.8 percent. A data released by the Commerce Ministry on Friday shows that eight major industries have registered a decline of 38 percent during April 2020. However, India can be satisfied that its economy is still better than China. China’s economy declined by 6.8 percent in January-March 20.