Indian economy to face the biggest decline in thw last 40 years due to the lockdown
GDP growth rate projected to be zero in the current financial year 2020-21
MAY 22 (WTN) - Coronavirus infection disease (COVID-19) has greatly affected the economy of the whole world. As far as India is concerned, the lockdown of the fast growing Indian economy has broken back. The lockdown has given such a big shock to the growing economy of India that once targeted the economy of $ 5 trillion, and in the current financial year, India will face the biggest economic downturn of the last 40 years.
For your information, let's know that the rating agency Moody's Investors Service estimates that the Indian economy may see a huge decline in the current financial year 2020-21. In fact, this is the first time in independent India that an epidemic has resulted in a 'lockdown', and this has led to a complete ban on the economic activity of the entire country.
Now, everything in the country was 'closed' due to the lockdown, this is the reason why the domestic economy may face a huge decline this financial year, facing challenges from going to the lowest level of consumption and stagnating business activities. In fact, the 'lockdown' has created a confronting crisis in the unorganized sector of the country, and this region contributes more than half of the GDP.
According to rating agency Moody's, "India's economic growth slowed to a six-year low before the Coronavirus crisis caused by the economic slowdown caused by the China-US trade war." According to Moody's, "The steps taken by the central government in the economic stimulus package are not in line with expectations as the problems of the economy are much broader than this."
Regarding India's economy, Moody's says in its report, "We estimate that the GDP growth rate of the Indian economy will decline realistically in the current fiscal year 2020-21. Earlier, we had predicted the growth rate to be zero." But Moody's hopes that after recovering from the Coronavirus crisis, India's GDP growth in the coming fiscal year 2021-22 may be even stronger than projected at 6.6 percent.
However, Prime Minister Narendra Modi himself has announced a relief package of 20 lakh crore to the majority of the people affected by the lockdown. But this direct fiscal stimulus of the government may remain within the range of one to two percent of GDP. That's why because most of the relief schemes of the government are about loan guarantees or cash relief of the affected areas. Well, now it has to be seen how many days after lockdown does India's economy gain momentum?