Is Indian Economy Moving Towards a Slump?

Abstract

The Indian economy experienced the worst decline in GDP growth in its history (-23.9% in first quarter of FY’2021) while for last couple of months its Indian Index of Production (IIP) shows worsening performance. Fortunately, agriculture sector shows a bit green shoots, while most of the sectors show downward trend in production/sales amid lockdown due to Covid-19 crisis. The Indian economy faces a double whammy, on one hand there is a sheer lack of aggregate demand due to gigantic job losses as well as muted sentiment among consumers who became more thrifty amid the Covid-19 crisis; on the other hand supply got a hit due to lack of migrant workers/labour. The article attempts to analyse the ongoing economic issues that Indian economy is currently facing