NEW DELHI - India's economy contracted at its steepest pace on record of 23.9 per cent in the June quarter as the pandemic lockdown cut consumer and business spending, putting pressure on the government and central bank for additional stimulus and a rate cut.
The read-out for the June quarter was worse than the 18.3 per cent contraction forecast of analysts in a Reuters poll. Some private economists have said the fiscal year that began in April could see a contraction of nearly 10 per cent, the worst performance since India won independence from British colonial rule in 1947 and likely to push millions into poverty.
Mr Sujan Hajra, chief economist at Anand Rathi Securities, Mumbai, said the economic slump was widely expected as India was under lockdown for almost half of the quarter.Data showed that manufacturing has already entered a recession as output fell 39.3 per cent in the June quarter after falling 1.4 per cent in the previous quarter.