India's economy contracted by 23.9 percent in the April-June quarter, its worst performance in decades, according to official data released by the country's Union ministry of statistics and program implementation on Monday as coronavirus hit businesses and livelihoods across the country. The contraction followed 3.1 percent growth in the previous quarter, which was the worst performance in at least eight year. Global economies are experiencing contraction due to the coronavirus pandemic. The International Monetary Fund (IMF) has estimated a global contraction of 4.9 percent in 2020. The United Kingdom's economy has reported a 21.7 percent year-on-year plunge in the June quarter. But India's growth had slowed even before the pandemic struck. Many economists believe Prime Minister Narendra Modi's demonetization of currency in 2016 and a hasty rollout of a goods and services tax inflicted blows to manufacturing. Hoping to avoid more serious economic damage, Modi's government in May announced a $266 billion stimulus package, but consumer demand and manufacturing are yet to recover. Many economists say the distress caused by the contraction could be much worse within the informal sector, the backbone of India's economy, which was hit far harder than the organized sector during a nationwide coronavirus lockdown during much of the April-June quarter. There are hopes for some recovery in the next quarter as tens of thousands of migrant workers who returned to their villages after losing jobs during the lockdown are gradually returning to cities as more workplaces open up. But the picture remains grim for many of the jobless.
