India's Worst Recession Since Independence Is Here: Crisil

Sunil Fernandes

India's fourth recession since Independence, first since liberalisation, and perhaps the worst to date is here, Crisil has stated in a report.

The rating agency sees the Indian economy shrinking 5 per cent in fiscal 2021 (on-year), because of the Covid-19 pandemic. This probably is one of the worst predictions, from a leading agency.

"The first quarter will suffer a staggering 25 per cent contraction and about 10 per cent of gross domestic product (GDP) in real terms could be permanently lost. So going back to the growth rates seen before the pandemic is unlikely in the next three fiscals. A month is a long time in today's pandemic-stricken world," the rating agency has said.

It expects non-agricultural GDP to contract 6%, agriculture could cushion the blow by growing at 2.5%.

"In the past 69 years, India has seen a recession only thrice - as per available data - in fiscals 1958, 1966 and 1980. The reason was the same each time - a monsoon shock that hit agriculture, then a sizeable part of the economy.

The recession staring at us today is different. For one, agriculture could soften the blow this time by growing near its trend rate, assuming a normal monsoon. Two, the pandemic-induced lockdowns have affected most non-agriculture sectors. And three, the global disruption has upended whatever opportunities India had on the exports front," Crisil has stated.

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