Farm sector and GDP
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Subject: Economy
Context:
For the first time, farm sector witnessed growth even as GDP sees a contraction
Concept:
- April-June may be the first time that India’s economy would contract year-on-year since the government started coming out with quarterly estimates of GDP from 1996-97.
- But the data for the quarter, to be released by the National Statistical Office on August 31, could also show GDP falling for the first time in spite of agricultural production going up.
- The country’s GDP registered an annual decline, at minus 5.2%, last in 1979-80. But that year also recorded negative growth for agricultural GDP, at minus 12.8%.
- The first quarter especially, which bore the brunt of lockdown-induced production disruptions, is expected to record huge de-growth based on a host of indicators. These include the index of industrial production (down 35.9% in April-June 2020 over April-June 2019), commercial vehicle sales (minus 84.8%), finished steel consumption (minus 55%) and cargo handled by major ports (minus 19.7%).