India GDP growth rate:India GDP Annual Growth Rate 2020

India GDP fall 23.9% data collection 

India's GDP has a big fall due to the COVID-19 crisis. India's gross domestic product contraction was predicted.GDP represents a Gross Domestic Product value, it is the total monetary value of goods and services produced within the country during a specific period of time (per year). 

However, the Gross Domestic Product rate reflects the cost of living and the inflation rate of the countries. The total value of the product is added to the total GDP.GDP per capita at PPI is more useful than living standards between nations. Nominal value basically all final goods and services produced within the nation. Nominal value based on money and real value based on goods and services for one year.

The Indian economy was affected due to COVID-19 because India inflicts a lockdown since March and later on extended many times. So Now India is the third-largest affected country in the world by the COVID pandemic. India holds a huge market in the field of construction, hotels, and transportation & manufacturing, etc.

India boosts the Annual growth GDP through the fastest growing sector in construction, hotels, and transportation & manufacturing financing, insurance, real estate, etc which contain 60percent of GDP. But due to pandemic India recorded the biggest fall in these fields. So Indian economies shrink 23.9% in the second Q2.  

India's GDP 23.9% fall is the biggest fall compare to the previous 20 years. It was predicted the Indian economy was slowing down to the outbreak of a pandemic. Almost 25% of GDP would shrink in the first quarter of the financial year 2020-2021.

GDP growth for the quarter ended in 2020 break 23.9% less which is a high breakdown compare to the previous year. India has a low performance based on economic growth compared to the US record due to the COVID-19 pandemic. Now India is the top of the list in GDP falling -23%.

What caused GDP contraction

An economic contraction is a decline in real income, manufacturing, industrial production, and retail sales. Its effect to rapidly increase the unemployment rate.  It is measured by the Gross Domestic Product which drops in the second  Q2   due to the COVID pandemic.

The economy is based on the four most important engines of growth. Accordingly, GDP defines by the following formula GDP = C + I + G + NX where C is Consumption, I  investment, G for Government Spending, N for  Net Exports. The economy mostly depends on private consumption by households. We purchase goods and products in the market that price expenditures called the private consumption in GDP by people.

In the previous year, private consumption contributes 56.4% of all the GDP. The second-biggest engine demand generated by the Private sector in which private corporate & businesses invest money for a contribution of GDP rising, it contributes 32% of all the GDP, G represents the government contribution to goods and services.so basically C + I are the most demanding engine to risen the GDP. We need to invest more in this two-sector to increase our economy.

In India, if we compare the previous year's GDP growth rate in Q1 2019 and GDP Q1 in 2020 then we observe that there is a big fall in the consumption expenditure by individuals which is less -27%  in this year and the huge fall in the investment by private business  -47% compared to the previous year. This is the result of massive contractions in GDP.

Although, the government increases the expenditure in the economy compare to the previous year by 16%, but we know that the government has a limitation for investment in the national economy. Overall demand impact in Q1 2021 that's reason saw a massive contraction in Q2 2021 GDP. 

According to the previous year's total production 35,35,267 and this year total production 26,89,556 in quarterly Q1, which means GDP -23.9% fall in 2020.

A fairly conservative estimate would be a contraction of 7% for the financial year. But according to the current estimation  GDP could be worst. We hope so India's GDP growth rate would not be worst in the future, In India GDP growth rate has a low base by this year. So we have to increase the contribution to private consumption by household and investment by the business would be more in the future.