COVID-19 Impact: India Facing Worst Recession Since Independence

NEW DELHI: The coronavirus pandemic has hit the Indian economy, adversely. India has to face new challenges in building the economy. All the industries and development activities halted for more than 50 days amidst the ongoing nationwide lockdown. The government eased the lockdown restrictions in some parts of the country.

Crisil has said that India is facing the worst recession since Independence and stressed the impact of COVID-19 on the economy. The report said that, "In the past 69 years, India has seen a recession only thrice as per available data1, in fiscals 1958, 1966 and 1980. The reason was the same each time, a monsoon shock that hit agriculture, then a sizeable part of the economy."

Crisil further said that, "For one, agriculture could soften the blow this time by growing near its trend rate, assuming a normal monsoon. Two, the pandemic-induced lockdowns have affected most non-agriculture sectors. And three, the global disruption has upended whatever opportunities India had on the exports front." 

There is a catastrophic economic contraction in the fiscal year 21 on account of slump in the economic activities. Fitch said that "The biggest forecast cut was to India where we now anticipate a 5 percent decline in the current financial year (ending March 2021) in contrast to an earlier forecast of growth of 0.8 percent. India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak."