Chidambaram slams govt over GDP fall, says 'will take months to register positive growth'

Attacking the government over a sharp decline in the GDP numbers, Congress leader P Chidambaram said that it will take months for India's economy to register positive growth. On Monday, the government data revealed that the Indian economy had contracted by 23.9% in the April to June quarter (Q1 FY21).

'A matter of shame to the government'

The former Finance Minister, speaking through video conferencing at a press conference, said that the decline meant that "about one-quarter of the gross domestic output as on June 30, 2019, has been wiped out in the last 12 months. Another way of looking at it is, since the end of 2019-20, the gross domestic output has fallen by about 20%"

He pointed out that agriculture, forestry and fishing are the only sectors which have grown in the quarter while a "sharp decline" has been noticed in manufacturing, construction, trade, hotels, and transport among others.

India's GDP crashes to -23.9% for Q1

"The estimates do not come as a surprise to us. They should be a matter of surprise to the government that was seeing 'green shoots' on several days during the first quarter. They should also be a matter of shame to the government that did nothing -- literally nothing -- to cushion the fall by taking suitable fiscal and welfare measures," he said, adding, "but we know that the Modi government has no shame and will not acknowledge its mistakes."

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"It will take many months before the economy turns the corner and registers positive growth. The inaction and ineptitude of the government give us no hope that we will see light at the end of the tunnel at any time soon," he further said.

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The provisional estimates of GDP were released on Monday for the quarter April-June 2020. The contraction by 23.9% of the Indian economy in April to June quarter (Q1 FY21), marks the first contraction in more than 40 years as COVID-19 pandemic compressed consumer demand and private investments, government data revealed. The National Statistical Office (NSO) said gross value added (GVA) came in at minus 22.8%.

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(With agency inputs)