NEW DELHI (AP) – India’s economy grew by 4.2 per cent in the fiscal year that ended in March, down from 6.1 per cent the previous year, the government said on Friday, and is likely to contract this year because of the coronavirus pandemic.
The growth dipped to 3.1 per cent in January-March, the last quarter of the fiscal year, as the country began feeling the effect of the pandemic, the Ministry of Statistics and Programme Implementation said.
It said in a statement that the estimate may be revised as more data is gathered from businesses affected by a nationwide lockdown imposed on March 25 that is currently scheduled to end today. The government has not yet said whether it will be extended.
The main opposition Congress party said that 4.2 per cent economic growth in 2019-2020 was the lowest in the last 11 years.
There was no indication of any government action to spur demand and “instead it was pushing the country into deep debt through lofty claims of stimulus package to counter COVID-19”, said Gourav Vallabh, a party spokesman.
Last week, India’s central bank cut its key interest rate to four per cent in an attempt to counter the blow to the economy from the pandemic and the lockdown meant to contain it.
Reserve Bank of India Governor Shaktikanta Das forecast that the economy will contract in fiscal 2020-2021. He did not give a specific figure. Some private economists expect it to contract by as much as five per cent.
Prime Minister Narendra Modi’s government recently announced an INR20 trillion (USD266 billion) package to support the economy. Millions of workers have fled cities after losing their jobs when authorities imposed the lockdown.
The package included income tax cuts, liquidity injections for cash-strapped companies and government-backed bank loans. It also said it would bar foreign companies from competing in bidding for government contracts of up to USD26 million to promote self-reliance and protectionist policies.