New Delhi, May 30
India needs to implement an intelligent lockdown exit strategy to prevent irreversible growth collapse, the SBI said in a research report on Saturday. India's economic growth slipped to an 11-year low of 4.2 per cent in 2019-20 and to 3.1 per cent in January-March, the lowest in the last 40 quarters.
The nationwide lockdown to prevent the spread of Covid with effect from March 25 has hit economic activities. The fourth phase of the lockdown is set to expire on Sunday. "We now believe that we should implement an intelligent lockdown exit strategy as the discussion has moved from debate between lives and livelihood to also between lives and lives as an elongated lockdown will only prolong irreversible growth collapse," SBI's research report 'Ecowrap' said.
Going by past experience, recovery from recession often tends to be slow and takes five to 10 years to reach the former peak levels of economic activity, it said. Commenting on the GDP data released on Friday, the report said loss of economic activity due to the lockdown in the last few days of March has dragged the GDP growth to a 40-quarter low of 3.1 per cent in the fourth quarter of 2019-20.
With this, the full year 2019-20 GDP growth comes to 4.2 per cent (11-year low) compared to 6.1 per cent in the preceding financial year.
In terms of sectors, the only silver lining was agriculture, it said. Agriculture and allied activities grew at 4 per cent in the fiscal that ended in March 2020, compared to the year-ago growth of 2.4 per cent.
However, the Central Statistical Office (CSO) has significantly revised the previous quarters' growth rates (compared to third quarter release), which is "quite puzzling and raises questions on data quality and remarkable volatility in the new series and we believe that a methodological note from the CSO explaining the frequent revisions will be very useful," it said. — PTI
Recovery tends to be slow
- The report says loss of economic activity due to the lockdown in the last few days of March has dragged the GDP growth to a 40-quarter low
- Recovery from recession often tends to be slow and takes five to 10 yrs to reach former peak levels of economic activity, the report says
from The Tribune https://ift.tt/3dkht0H
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