India is in a technical recession for the first time in history: RBI

The RBI has been quoted by media reports as saying that the Indian economy has entered a technical recession for the first time in its history. As per a model, the GDP contracted in the second quarter of the current financial year, too. The first quarter saw a contraction of about 23.9%. The second quarter may have seen a contraction of nearly 9%.

A consolation is that India will return to growth in the third quarter. As per the standard definition, a country is described to have hit recession if two successive quarters throw up negative growth. This has happened for the first time in India’s history. 

Calling out the Narendra Modi government, Rahul Gandhi said that the Prime Minister’s actions have turned India’s strength into its weakness.

Some economic commentators are of the view that the lockdown has depressed demand and destroyed livelihoods. So, the recession was only to be expected. The Centre must offer a large fiscal stimulus to stimulate demand and revive the faltering economy.