Well it seems everyone is blaming COVID 19 for contraction of the economy and we thought is that really the case?
Even before the COVID-19 outbreak, which led to a shutdown of the economy and made way for the worst contraction of India’s GDP in decades in the April-June quarter, the economy was already witnessing a slowdown.
Decline in GDP growth, decrease in industrial output, fall in tax & GST collections and a massive reduction in power demand were all visible well before the impact of the lockdown.
GDP growth has been on a downward slope since Q4 FY17, and slowed to a 11-year-low of 3.1% in Q4 FY20.
Output of the eight core sectors (bar) and the index of industrial production (line) contracting between August and October 2019.
The chart shows growth in gross tax revenue, which decelerated to -19.8% y-o-y last December.GST collections (blue bar), had also been downtrend since early 2019, though it recovered towards the end of the year. The y-o-y growth of compensation cess (red line), on luxury and sin goods also witnessed deceleration.
Another indicator of a slowing economy. This had dropped by 13.2% in Oct2019, the steepest fall in 154 months. The chart shows the y-o-y % change in electricity demand.
COVID has definitely made things worse for Indian economy but things were not that great pre covid level as wellSource : The Hindu