The Big Story: Mirage
Anyone paying attention to the Indian economy knew that the Gross Domestic Product numbers coming in for the April-June 2021 quarter would not be easy to read, since they would be based on the 24.4% contraction seen in the equivalent quarter in 2020 when the country saw its first, harsh Covid lockdown.
Except, that is, for representatives of the Indian government who could be expected to parrot the old cliches – ‘the worst is over’ and ‘V-shaped recovery’ – no matter what the underlying numbers actually showed.
And indeed, that is what happened. India clocked 20.1% growth for the April-June 2021 quarter, despite that period coinciding with the devastating second wave.
But the massively positive headline number masked a tremendous amount of underlying pain.
A few figures tell the story:
- The actual numbers of the April-June 2021 quarter compared to the the January-March 2021 quarter showed a 16.9% contraction, making it clear that the second wave hit the economy hard – only not as a badly as the first lockdown.
- The actual numbers of April-June 2021 quarter were also 9.2% below the equivalent figures in the pre-pandemic April-June 2019 quarter, meaning the Indian economy is smaller today than it was two years ago.
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