According to Central Statistics Office, India’s economy is expected to contract 7.7 per cent in the current financial year ending in March as finance minister Nirmala Sitharaman gets set to present the Union Budget 2020-21 on February amid the coronavirus pandemic.
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India’s finance minister Nirmala Sitharaman is widely expected to increase spending on infrastructure and boost manufacturing.
The Indian economy had contracted 23.9 per cent in the April-June quarter last year as the country entered lockdown which reduced to 7.5 per cent in the September quarter as many sectors of the economy opened.
The Indian economy had grown 4.2 per cent in the fiscal year 2019-20. India is one of the worst-hit country due to the virus with over 10.4 million cases and over 151,525 fatalities with the economy hit hard due to the virus with millions losing jobs.
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India is among the worst-performing economies in the world with the country entering a “technical recession” for the first time since 1947 as the hospitality and construction sectors nosedived amid the virus lockdown.
India’s farming sector continued to grow amid the virus crisis even as the manufacturing sector also increased during the July-September quarter after plunging nearly 40 per cent during the lockdown period last year.
The International Monetary Fund(IMF) had predicted India’s economy would contract 10.3 per cent in 2020. A report by Oxford Economics had earlier projected India’s annual output would be 12 per cent below pre-virus levels through 2025 as the country continues to grapple with the virus.
The government last year had announced new measures to support the manufacturing sector and create jobs as the country faced a “technical recession” as India’s Reserve Bank had said that “contraction is ebbing with gradual normalisation in activities and expected to be short-lived”.
The RBI had asserted that Indian households and corporations continued to face financial stress.
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