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In the backdrop of the recent estimates of growth rates for India, there are concerns that the economic contraction may not be just a transient phenomenon but of an extended slowdown and a slow turnaround. Analyse.

Topic : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

4. In the backdrop of the recent estimates of growth rates for India, there are concerns that the economic contraction may not be just a transient phenomenon but of an extended slowdown and a slow turnaround. Analyse.  (250 words)

Reference: Financial Express 

Why the question:

According to data released by the National Statistical Office, the Gross Domestic Product (GDP) of India has shrunk by a record 23.9% in the April to June 2020 quarter in comparison to the same period in 2019.

Key Demand of the question:

Discuss in detail the nuances of the economic slowdown.

Directive:

AnalyzeWhen asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.

Structure of the answer:

Introduction:

Explain in brief the current situation.

Body:

The contraction reflects the severe impact of the COVID-19 lockdown, as well as the slowdown trend of the economy even pre-COVID-19.

Agriculture was the only sector which recorded a modest growth of 3.4% in year-on-year terms. All other sectors saw a contraction, with the steepest fall of 50% in construction, and the trade, hotels, transport and communication services category shrinking 47%. On the expenditure side, private consumption fell 26.7%, while investments, as reflected by gross fixed capital formation plunged 47%, and exports contracted almost 20%. Government final consumption expenditure grew 16.4%.

Present the associated concerns.

Conclusion:

Conclude with what should be the way forward.

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