India’s construction industry suffered a contraction of 50.3 per cent in the quarter ended June 30, official data released on Monday showed, as the country’s GDP or gross domestic product shrank a record 23.9 per cent, reflecting the damage caused by the coronavirus pandemic. Financial services – which account for the lion’s share of the country’s services sector – shrank 5.3 per cent, and were among the seven out of eight categories that succumbed to the negative territory. However, agriculture bucked the trend, with an expansion of 3.4 per cent, along with forestry and fishing.
The country’s GVA or gross value added at constant price declined 22.8 per cent in the first quarter of current financial year, as against a 3 per cent rise in the January-March period.
Contrary to GDP, which measures changes in consumption – offering a demand-side perspective, GVA gauges trends from a producers’ perspective – or supply side.
The readings were alarmingly in contrast to the previous quarter, as the April-June period fully captured the impact of COVID-19 and related restrictions on an already-slowing economy.
In the quarter ended March 31, agriculture had expanded 5.9 per cent, and financial services a humble 2.4 per cent, but manufacturing and construction contracted 1.4 per cent and 2.2 per cent respectively.
Here’s how the latest industry-wise readings fare in comparison to the previous quarter, and the three-month period ended June 30, 2019:
|Industry||GVA Growth At Constant Prices (Year-On-Year)|
|April-June 2020||January-March 2020||April-June 2019|
|Agriculture, forestry and fishing||3.4%||5.9%||3%|
|Mining and quarrying||-23.3%||5.2%||4.7%|
|Electricity, gas, water supply and other utility services||-7%||4.5%||8.8%|
|Trade, hotels, transport, communications and services related to broadcasting||-47%||2.6%||3.5%|
|Financial, real estate and professional services||-5.3%||2.4%||6%|
|Public administration, defence and other services||-10.3%||10.1%||7.7%|
|(Source: Ministry of Statistics)|
The government’s Chief Economic Advisor, Krishnamurthy Subramanian, has said the slump in GDP numbers was largely expected and due to an “exogenous shock that has been felt globally,” and the economy is “experiencing a V-shaped recovery” after easing of the lockdown-related restrictions implemented in late March.
“We should expect better performance in subsequent quarters,” he said.