GDP drops to Rs 26 lakh crore in Q1; bank credits show growth
Ministry of Statistics & Programme Implementation released the estimates of gross domestic product (GDP) for Q1FY21 on Monday. As per the data given by the ministry, the GDP size of the country showed a contraction of 23.9 per cent last year. Let’s discuss what does that actually mean.
GDP, in simple words, is the total value of goods & services produced in a country over a period of time. Further, there is also a bifurcation between a nominal GDP and a real GDP. The real GDP is measured from GDP data having a total value of all the final goods & services during a given year, accounting for inflation. It is calculated using the prices of a selected base year. While the nominal GDP is the value of all the final goods & services during a given year and is calculated by using the prices in the given current period, in which the output is produced.
As per the data published on August 31, the real GDP of Q1FY21 was estimated at Rs 26.90 lakh crore, which declined from Rs 35.35 lakh crore as of the end of the same quarter during the last fiscal, showing a contraction of 23.9 per cent. While the nominal GDP was estimated at Rs 38.08 lakh crore, as compared to Rs 49.18 lakh crore of last year, showing a contraction of 22.6 per cent.
Key indicators such as aggregate bank deposits, bank credits, LIC premium, and CPI general index showed gains over the last year's values. All other indicators declined as much as 99 per cent. Production of crude oil, coal, cement, cargo ports & airports, commercial vehicle sales, etc declined in the range of negative 15 per cent to 99 per cent.
On Monday, the Department of Promotion of Industry & Internal Trade (DPIIT) also released the Index of Eight Core Industries (ICI) for July 2020. The combined index of eight core industries stood at 119.9 at the end of July, which is a drop of 9.6 per cent (provisional) when compared on a YoY basis. The final growth rate of the index is revised at -37.9 per cent. The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).