India enters into technical recession for first time in history: RBI report
After two successive quarters of GDP contraction, 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," the report was quoted sa saying by news agency IANS.
It however said that 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.
Soon after the report, Congress leader Rahul Gandhi targeted the government over the state of the economy, claiming the country has entered into a recession due to the policies of Prime Minister Narendra Modi.
"India has entered into recession for the first time in history. Mr Modi's actions have turned India's strength into its weakness," he said on Twitter.
(With IANS inputs)
