Question

"The Indian economy saw its worst contraction in decades, with GDP shrinking by a record 23.9% and it is the sharpest contraction since quarterly figures started being published in 1996".

Explain this statement clearly using graphs figures and data. Use bullet points. Answer only if you know. Please don't give any wage and lengthy answers. Be pointistic.

If I find it plagiarised ill report you.

Answer 1

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Question:

Answer:

Indian economy is a capitalist economy and it is the largest democratic nation with 135 cr. It is the 5th largest economy of the world and the size of economy is -2.94 trillion-India GDP (PPP): $10.51 trillion.India Nominal GDP: $2.94 trillion-India GDP (PPP): $10.51 trillion. India is the fastest-growing trillion-dollar economy in the world. The GDP growth rate of the Indian economy was declining (nominal) scince 2016 0n regular basis. GDP growth rate was 8.6% in 2016 and 5.02% in 2019. But during the COVID-19 crisis the Indian economic affected worst. India affected worst during the lock down. Now India has became second most COVID-19 affectvive nation after the USA. The major sector that have affected more are- retail, aviation, tourism, hospitality, trade, minig etc. Service industry play an important role in Indian economy and its contribution in Indian GDP is 50%. The IT industry and outsourcing business play an important role in serve industry and more than 90% services are exported to EU and USA that are affected badly due to Corona crisis. The USA is the worst affected nation of the world. Other side the SME industry affected worst in India during this pandemic that play an important role in the Indian economy. onsumer demand, which determines 60% of GDP, is unlikely to return in a hurry as most people are stepping out only to buy essentials. Due to these reasons the Indian economy shrunk  by a record 23.9% in the last quater of 2020 and it is the sharpest contraction since quarterly figures started being published in 1996.  India was last in recession in 1980, its fourth one since independence. The measure reason of this crisis is decreasing AD rapidly during the pandemic. The unemployment rate is 25% and millions of other people have lost their job who are not in organized sector and the government has not record regarding the same. So, during this pandemic million of Indian have fallen into a deep poverty. So, losing income and future uncertainty of the about the economy have decreased the spending capacity of the consumers and CCI also. Thses factors affect the consumption level in the Indian economy worst. Other side increasing inflation hit the Indian consumers and the Indian economy also affect the real income of the consumers worst. This time inflation is more than 6% and Income has fallen rapidly so, its affect the spendable income of the Indian people worst. So, these all the factors/causes or reasons hit the indian economy worst and the the Indian economy shrunk  by a record 23.9% in the last quater of 2020 and it is the sharpest contraction since quarterly figures started being published in 1996.

During the 1996, 1997, 2000, 2002, 2008, 2017, 2018, 2019 (last quater) and 2020 the ecoomy had shrunk by -0.02%, -3.50%, -5%, -1.02%, -4..57, -1.21%, -0.92., -1.10 & 24% respectively.

Graphical representation of reason of  GDP shrinking by a record 23.9%:

You can see how the decreasing AD shift AD curve left from AD1 to AD2 that decraese output and price.

Graphical representation of GDP shrinking:

Thank You