Annual growth plunges by record 7.3%

MUMBAI－India's economy contracted by a record 7.3 percent in 2020-21, official data showed on Monday, its worst recession since the country gained independence in 1947 as coronavirus lockdowns put tens of millions out of work in the world's second-most populous nation.

Asia's third-largest economy grew by just 1.6 percent between January and March, a period representing the fourth fiscal quarter, after exiting its first technical recession following two successive quarters of contraction.

About 230 million Indians fell into poverty due to the pandemic, said a study by Bangalore's Azim Premji University, which defined the poor as those living on less than $5 a day.

An easing of restrictions toward the end of 2020 helped propel a tentative recovery, but this may prove short-lived following an explosion in COVID-19 cases in April and May.

India's vicious second wave, which has killed 160,000 people in just eight weeks, prompted further lockdowns and saw 7.3 million people lose their jobs in April alone, the Centre for Monitoring the Indian Economy said.

That means more pain in a country where 90 percent of the workforce is in the informal sector with no social safety net, and where millions do not qualify for emergency government rations.

The government has so far refrained from announcing any fresh major stimulus measures. It has faced growing criticism, including from Nobel prize-winning economists Esther Duflo and Abhijit Banerjee, for focusing on loans to businesses rather than direct cash handouts to vulnerable households.

However, India's central bank is projecting annual growth of 10.5 percent and the International Monetary Fund 12.5 percent, the fastest among major economies.

Agencies - Xinhua