GDP may reduce by 16.5% in Apr-Jun Quarter due to rise in coronavirus cases: SBI Report

New Delhi: The country’s GDP or Gross domestic product is probably going to see its first contraction in quite a while as the coronavirus pandemic keeps on spreading, its largest lender, State Bank of India, said in a report. The report included that rural recovery is unlikely not going to help the pace of development in subsequent quarters as the per capita month to month use in urban zones is at any rate 1.8 occasions that of rustic territories and country wage development in genuine terms may in any case be negative. 

The de-growth in corporate gross value added (better-than-expected results of some financial and non-financial companies) has been fundamentally better than revenue de-development in Q1 FY21 to the extent the consequences of listed companies are concerned. 

So far, around 1,000 listed entities have announced their results for the first quarter. The outcomes indicate more than 25 percent decrease in revenues and more than 55 percent decrease in profits. In any case, the decrease in corporate gross value added is just 14.1 percent. 

“In principle, revenue decrease of listed companies has been far outstripped by cost rationalization, in this way not affecting edges,” said the report, including that coronavirus essentially penetrated the rural areas in July and August. 

The level of cases in rural districts to total new cases has risen to 54 percent in August. Also, the number of rural districts with under 10 cases has decreased essentially. Andhra Pradesh and Maharashtra have been affected all the more severely, with increasing coronavirus penetration in rural areas.

These districts contribute two to four percent of the gross state domestic product (GSDP) of their separate states, indicating that cases are penetrating deep rural hinterlands, the report said. 

The report estimates total GDP loss due to COVID-19 to be 16.8 percent of GSDP. A state-wise analysis indicates that the top 10 states accounted for 73.8 percent of absolute GDP loss, with Maharashtra contributing 14.2 percent of total loss followed by Tamil Nadu (9.2 percent) and Uttar Pradesh (8.2 percent). 

Despite the fact that India took 65 days to reach at the one lakh mark from 100, and an additional 59 days to reach at the 10 lakh mark, the current multiplying rate in India is around 22 days. 

India’s doubling rate is at par with countries, for example, Argentina and the US. The world average is 43 days. Aside from this, India also has the highest death per million rate among major Asian economies, the report said.

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