For the readers on the go:
The Indian economy entered its first-ever recession since quarterly records started in 1996. India imposed a strict lockdown in March, affecting demand for non-essential goods and services. The government and central bank have supported the economy with a $405 billion or ₹ 29.88 lakh stimulus accounting for 15% of the GDP. The GDP has declined by 7.5% this quarter compared to last year, an improvement from a record 24% decline in the quarter before.
Dive Deep:
Recently, the government announced additional stimulus measures under its Atmanirbhar Bharat series of announcements. Under Atmanirbhar Bharat 3.0, Finance Minister Nirmala Sitharaman listed measures worth ₹ 2.65 lakh crore with a focus on job creation and sectors such as real estate, taking the total monetary and fiscal aid in the country’s battle against COVID-19 to ₹ 29.88 lakh crore or 15% of its GDP.
The RBI has been doing the heavy lifting on providing stimulus to the economy, having lowered the key benchmark rates by a total 115 basis points (1.15 percentage point) so far in this calendar year.
The central bank has infused liquidity and transferred crores of rupees in dividend to the government, despite inflation remaining well beyond its comfort level of 2-6%.
