According to the Reserve Bank of India (RBI), since independence in 1947, India has faced economic downturn four times in1958, 1966, 1973 and in 1980. The recession due to Covid 19 is the fifth economic downturn in the history of country.
How RBI predicted this recession?
The economic downturn is defined as a decline in sales, income and employment along with the country's economic activities.
Recessions in the history of India
First Recession
The recession that India faced in 1957–58 was due to a balance of payments problem. This was mainly due to the weak monsoon, which severely affected agricultural production. In 1958, GDP growth was only -1.2%
Second Recession
India fought wars with China in 1962 and with Pakistan in 1965. Wars badly affected the economy and eventually the drought made the situation worst. They result in GDP growth rate as -3.6%.
Third Recession
In 1973, the world faced its first energy crisis. Arab oil producing countries banned oil exports to the countries that favored Israel. 414 of 1972, India's oil imports during this increased from USD414 million in 1972 to USD 900 million in 1973.GDP growth rate in 1973 was -0.32%.
Fourth Recession
The world saw the oil crisis for the second time in 1980. This was due to the decrease in oil production due to the Iranian revolution. This was further increased by the Iran-Iraq war that followed the revolution. This created a balance of payments crisis for India. The GDP growth rate in 1980 was -5.2%.
Fifth Recession
Recently the whole world has suffered the pandemic of Covid 19 which also affected the whole economy of the world. The economy of india was also affected with -23% GDP growth during the pandemic.
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