India’s economy contracted 7.5% in the July-September quarter after a record 23.9% drop in the previous three months, pushing the country into a recession for the first time in its history.
The contraction came despite the government lifting a strict two-month lockdown imposed across the country in March after the outbreak of the pandemic.
A country enters a technical recession if its economy contracts for two successive quarters.
Data released Friday by the National Statistical Office showed the industry normalizing faster than the service sector.
Manufacturing grew 0.6% in July-September after contracting a whopping 39% in the previous quarter, according to the report. While the agricultural sector grew 3.4%, trade and services contracted 15.6%, he said.
The 23.9% contraction of GDP in the April-June quarter caused massive unemployment in small and medium-sized enterprises and created rural problems.
The government announced stimulus packages after it lifted the blockade imposed in March.
In May, it introduced a $ 266 billion package to boost consumer and manufacturing demand. A large part of the package was actually loans from banks, many of them unsecured.
This was followed by a $ 35.14 billion package earlier this month to stimulate the economy by boosting employment, consumer demand, manufacturing, agriculture and exports affected by the coronavirus pandemic.
The aim of the incentives is to attract investment and allow India to be part of the global supply chain.
Finance Minister Nirmala Sitharaman said a strong economic recovery is taking hold, citing an increase in the collection of taxes on goods and services.
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