Indian economy May see recession For The first time In 40 years, lockdown Will Be The reason: Report - Timespro News


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Thursday, April 16, 2020

Indian economy May see recession For The first time In 40 years, lockdown Will Be The reason: Report

Prime Minister Narendra Modi's move to stop the spread of the corona virus in the country, the world's largest lockdown, could have a very adverse effect on the economy. Due to this, the country's economy may see negative growth for the first time in 40 years. According to Sonal Verma of Nomura Holdings, extending the lockdown period from 21 days to 40 days would result in a direct production loss of over 8 per cent.

Verma estimates that GDP will fall by 0.4 per cent in the current financial year. The last time our economy grew was negative in the year 1980. At that time, GDP was 5.2 percent. Varma, head of Asia Economics X-Japan at Nomura, said that even after the end of the lockdown, there will be an atmosphere of fear among the people. He said, 'Besides, there will be a big impact on the livelihood of the unorganized laborers and there will be a sharp increase in tension in the corporate and banking sector. Growth is likely to be disrupted even further.

As indicated from a report by the Researcher Center for Monitoring Indian Economy, the consumer sentiment index has hit a low since 2015, after the nationwide lockdown was declared on March 24.  The 100-basis index fell to 52 on March 29. In this way, it fell by 47 percent in just one week. This is reflecting the adverse effect on consumers' sentiments. The index remained at 102.5 within the first week of March.

Mahesh Vyas, managing director of CMIE, said in a report, "Very poor projections of the future make economic revival challenging after the lockdown is lifted." Statistics show that the economic value of lockdown is huge. The income of the people has almost halved and many do not expect improvement soon. At the same time, Indian economist Abhishek Gupta said, "We reduce the GDP estimate for FY 2021 to -4.7 percent. This is 10.7 percent less than our earlier estimate of 6 percent of the corona virus.

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