The April-June quarter GDP data, released on Monday, showed the
deepest damage in the employment-creating sectors, like
construction and manufacturing. This comes at a time the Centre
and the Finance Ministry are talking about green shoots in the
economy.
According to the data released by the National Statistical Office, the
construction sector fell a staggering 50.3 per cent, while
manufacturing sector contracted by 39.3 per cent, at constant
prices.
New investments as a percentage of GDP, measured by gross fixed
capital formation, came in at 19.5 per cent (at nominal prices),
which is the lowest since the new GDP series with the 2011-12 base
year began, said Madan Sabnavis, Chief Economist with CARE
Ratings.
Almost all the major sub-sectors reported a contraction, with
construction activities, manufacturing sector and trade, hotels, and
transport in the services sector being hit the worst hit. The
contraction in some services is large, and as these continue to be
under restricted functioning, the improvement in the coming
quarters will be staggered,” said economist M Govinda Rao, chief
economic advisor with Brickwork Ratings.
Radhika Rao, economist at DBS Bank, said the sudden stop in
economic activity led to a sharp decline in employment-intensive
sectors like construction, manufacturing and trade, hotels, transport
etc.
