The coronavirus pandemic has caused an exogenous shock to India, but “the worst is behind us” and economic recovery “is clearly on”, Chief Economic Adviser Krishnamurthy Subramanian told NDTV on Tuesday. His remarks, in an exclusive interview to NDTV, come a day after official data showed the country’s gross domestic product (GDP) contracted a record 23.9 per cent in the quarter ended June 30, as the coronavirus pandemic-triggered lockdowns damaged an already-slowing economy.
The GDP reading was along the expected lines, he said, describing the pandemic as “clearly an exogenous shock” to the economy.
“Just to give you one fact: if you look at the fraction of countries where the GDP-per-capita (ratio) is going to shrink… that fraction is going to be the highest for the first time in 150 years. The last time this happened was in 1870,” said the Chief Economic Adviser to the Finance Ministry.
“In other words, we are living through an event that is once in a one-and-a-half century kind of event,” he said.
The country’s construction industry suffered a contraction of 50.3 per cent in the first quarter of current financial year, whereas financial services – which account for the lion’s share of the country’s services sector – shrank 5.3 per cent, data released on Monday showed.
