India's economy contracted by 7.3% during FY21, weighed down by a nationwide lockdown that pummeled consumption and halted most economic activities. This is the first full-year contraction in the Indian economy in the last four decades since 1979-80, when GDP had shrunk by 5.2 per cent. And while COVID-19 is believed to be the primary reason behind the same, Congress leader and former Finance Minister P Chidambaram appears to be holding the Central government responsible.
"The GDP in 2020-21 is lower than the GDP in 2018-19. 2020-21 has been the darkest year of the economy in four decades. The performance in the four quarters of 2020-21 tells the story," he said during a video interaction o n Tuesday.
The Rajya Sabha MP contended that while the current state of the economy was no doubt largely due to the pandemic and consequent curbs and lockdowns, it had been compounded by the "ineptitude and incompetent economic management" of the BJP-led NDA government at the Centre. He added that the advice of economists and expert institutions had been "rebuffed" and world wide experiences "ignored".
Chidambaram was addressing a special Congress Party briefing in response to the latest numbers. Several other prominent Congress leaders including Rahul Gandhi have also taken to twitter criticising the recently released GDP data.
Chief Economic Adviser K V Subramanian on Monday said the impact of the second COVID-19 wave is not likely to be large on the economy but going forward, fiscal and monetary support will be needed to prop up growth. He, however, said it would be difficult to predict if double growth target for the current fiscal can be achieved given the uncertainty surrounding the pandemic.
The Economic Survey 2020-21 released in January this year had projected GDP growth of 11 per cent during the current financial year ending March 2022.
(With inputs from agencies)