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Fall & Rise Of Indian Economy Since Lockdown – Free PDF Download

 

 

What we are discussing?

  • On March 24 last year, Prime Minister Narendra Modi announced one of the most stringent lockdowns in the world to curb the spread of coronavirus infections in India.
  • The pandemic not only prompted a major health crisis, but also endangered the largest economic shock, both in the country as well as globally.

  • According to the Economic Survey 2021, India’s humane policy response that focused on saving human lives, Recognised that the short-term pain of an initial, stringent lockdown would lead to long-term gains — both in terms of lives saved and in the pace of economic recovery.
  • Gradually, as the restrictions started to ease, economic activities also picked up in a phased manner.

India’s first technical recession

  • The Indian economy witnessed its first ever technical recession in the year 2020, with GDP growth remaining in the negative territory for two consecutive quarters.
  • GDP contracted by a record 4% in the first quarter of the last fiscal.
  • This was majorly induced by stringent nationwide lockdowns during April and May which stalled economic activity, shut out consumption, investment and led to loss of jobs and income for many.

  • However, with easing of Covid restrictions and resumption of business activities, India exited the technical recession phase in third quarter with a growth of 0.4%.
  • Recovery of activities have also been reinforced by some degree of rollout of Covid 19 vaccines.
  • The pandemic also pushed the global economy into recession.
  • The IMF described it as the worst decline since the Great Depression of the 1930s.

 

Job markets still recovering from pandemic blow

  • The coronavirus crisis proved to be a major blow for the job market too.
  • With businesses shut and activities coming to a halt, unemployment rate spiked to 23.52% in April last year as several firms recorded job losses.
  • The unemployment rate started tapering off from June onward when it was recorded at 10.2% in the month and further improved to 7.4% in July.

 

 

 

Rise in number of billionaires

  • Even at a time when unemployment rate in the country was at its peak, the number of billionaires surged in India.
  • India now has 177 billionaires with 40 of them entering the coveted club during the pandemic-stricken 2020.
  • According to the Hurun Global Rich List, Reliance Industries chairman Mukesh Ambani continues to be the wealthiest man in India with a net worth of $83 billion.
  • Ambani witnessed a 24% jump in fortunes and climbed up one spot to be theeighth richest man globally.
  • Smarly, Gautam Adani witnessed a spectacular rise in fortunes in the last few years.
  • His wealth doubled to $32 billion in 2020.
  • The Adani Group chairman climbed 20 places to be the 48th richest person globally and the second richest Indian.

 

Sensex in the last one year

  • The benchmark BSE Sensex witnessed its biggest-ever plunge on March 23 as coronavirus-led lockdowns across the globe triggered fears of a recession.
  • Crashing nearly 4,000 points in a single day, the index closed at 25,981.
  • Market capitalisation of BSE companies fell to Rs 101.86 lakh crore.

 

Economic measures announced by the govt

  • Lockdowns and travel restrictions imposed significant supply-side constraints on the economy, drastically reducing output and employment.
  • Moving ahead with the sole objective of saving lives, the government announced multiple measures at different stages of the pandemic.
  • These included calibrated fiscal support focused on essentials during lockdown and demand push during the unlock phase; financial measures; and structural reforms.
  • The measures were equivalent to Rs 29.87 lakh crore or 15% of India’s GDP.
  • These were subsequently backed by initiatives to further strengthen the economy.

Q) Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?

  1. The revenue earned-from will be utilised to pay back the external debt.
  2. The Government no longer intends to retain the management control of the CPSEs.
  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. None of the above

 

 

 

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