NEW DELHI (AP) – India’s economy, hit by the coronavirus pandemic, contracted 7.3% in fiscal year 2020-21, just before the country was hit by another catastrophic outbreak infections.
The economy grew at an annual rate of 1.6% in the January-March quarter, according to figures released by the government on Monday, but that recovery was stifled by an upsurge in infections in March. New cases daily are setting world records, prompting many states to announce widespread restrictions and lockdowns.
New cases and deaths have recently started to decline, but much of the country is still in some form of shutdown, with many industries and businesses unable to return to work.
In January, a government survey estimated that the economy – previously one of the fastest growing among major nations – would rebound, growing 11% in the current fiscal year, which began in April. But some rating agencies say growth will likely slow to around 10% due to the most recent increase in COVID-19 cases.
India recorded more than 150,000 new cases and more than 3,000 deaths on Monday. Overall, the country has the second highest total number of infections, after the United States, with more than 28 million confirmed cases and nearly 330,000 deaths. Both numbers are believed to be large undercounts.
After recording a daily spike of more than 400,000 new cases in May, experts say infections appear to be easing, especially in the capital, New Delhi and Mumbai. But there are fears that the virus may still rage in the poorest countryside, where access to health care is more limited.
While many states and cities remain stranded, a few have begun to ease the brakes on certain types of economic activity. New Delhi Chief Minister Arvind Kejriwal extended the current lockdown until June 7, but announced that manufacturing and construction activities could resume from Monday with health measures in place.
“We need to maintain a balance between controlling the spread of COVID-19 and allowing economic activities,” Kejriwal said during a virtual press briefing on Friday, according to the Press Trust of India news agency.
Kejriwal said the lockdown will be gradually lifted, with a focus on helping the most vulnerable, such as day laborers and migrant workers, many of whom work in factories and construction sites. Many of these workers found themselves out of work overnight when the government imposed a sudden lockdown in March last year, causing enormous distress.
India’s economy grew at an annual rate of 0.4% in the October-December quarter, after two consecutive contractions pushed the country into a recession last year.