Raghuram Rajan, former Governor of Reserve Bank of India, has given his first reaction after the first quarter GDP growth figures were released. Rajan said that the growth figures for the first quarter of the financial year are shocking. -23.9% growth figures have been described by Rajan as ‘alarming’.
The inclusion of an informal economy in GDP will worsen the figures.
– Raghuram Rajan
Raghuram Rajan has written in his LinkedIn post 23.9 per cent contraction in the Indian economy, when compared with a drop of 12.4 per cent in Italy and 9.5 per cent in the US, is even “worse off” than what comparisons suggest.
Rajan said that the government’s intention to do it seems negligible. The government is trying to save its resources for the future, but it is only going to get beaten by it. Now when the virus has attacked the country tremendously. The officers who have the responsibility of giving the economy a stimulus are underestimating the damage done by it.
Worst figures of GDP in 40-year history
GDP growth for the first quarter of the financial year 2021 ie April to June was -23.9%. This is the first time in the history of 40 years of measuring GDP when the GDP figures have come in the negative. At the same time, January-March quarter means that figure was 3.1% in the previous quarter. So in this way, there has been a 27% decline in GDP. This figure was 5.2% in the first quarter of the last financial year.
It is true that the Corona virus crisis is the most important reason behind such a big decline in GDP figures, but the figures of the last 7 quarters. The falling economy by 6.2 had already reached 3.1%. This means that our economy was already falling but Corona has shook it badly.