 Hello, let's talk about the GDP and are we in a bad situation or what? The GDP numbers for the April-June quarter which is the first quarter for the current financial year have been released. It is contracted by nearly 24% when compared to the last quarter and by nearly 23% when compared to the same quarter in the last year. Mosque sectors of the economy, sands agriculture, have suffered huge blows with manufacturing seeing a decline of 39%, construction a decline of 50% and so on. All of this is not entirely new. We knew that the pandemic and the lockdown would have an impact. But the extent of the blow indicates that there are deeper structural issues in the economy. We talked to journalist Paranjay Guwathakurtha on some of these issues. Thank you Paranjay for talking to us. So we have taken a look at the numbers of course and they are much worse than many experts, at least many of the mainstream experts predicted they had said there would be a 20% decline maybe but nobody was or even that was considered much more than what was possible. So before we go into some of the details, could you take a look at the larger picture and see was this something that was writing on the walls or were we all a lot of experts living in denial or was this something out of the blue? Government economists and supporters of the government and the ruling party were obviously in a state of denial because until very recently, until maybe a few months ago they were claiming none of the Indian economy is not going to be badly impacted by the hardy manner in which the lockdown was imposed and the suddenness with which the harshest arguably one of the harshest ever lockdown was imposed by Prime Minister Narendra Modi on the midnight of the 24th of March. Now we have official data. The government of India's own data shows that there's been a dramatic fall in the country's national income across domestic product by almost 23% about 22.8% in the period in the April to June period if you compare it with the April to June period of 2019. And if you want to compare the figures for April, May, June to the figures for January, February and March 2020, then the fall is almost 24%, 23.9%. This is the steepest fall in the last 40 years. This is the sharpest quarterly fall since these figures, since these quarterly statistics were published by the government that is from 1996 onwards. And what is very important to realize is that this fall has come after a steady decline in the rate of growth of India's GDP over the last two years. It has successfully fallen every quarter for the last eight quarters. Right. So, Paranjai, like you said, this is not a new phenomenon, it's part of a larger trend. So an key argument that has been raised, of course, is that this is completely due to the pandemic. I mean, it was an emergency situation, nothing much could have been done. So is that argument, does that, is any credit to that argument at all? Well, the lockdown is really what was responsible. The very, very harsh lockdown, I think, was primarily responsible. And I think these figures that have come out in the public domain, Paul, you know, there may be actually the actual figures, maybe worse than what you see, right? And I'll tell you why. Because the data for the unorganized sector or the informal sector, that data is based on extrapolations. Now, this is a big part of India's economy. The informal or unorganized sector accounts for about half of India's gross domestic product. More importantly, it accounts for over 90% of our total employment. Now, these figures are based on surveys that have conducted every five years. And the rest of the time, you're extrapolating on the basis of data. So I suspect that the fall may be even steeper in what the government has been is claiming. The other point that is often made that no, India has done not so badly compared to other countries. No, that's not so. If you look at the same quarter, we compare it. And if you look at the data that has been compiled by the OECD, the Organization of Economic Cooperation and Development, which is really a grouping of some of the richest countries in the world, it shows that only three countries really grew in this field. And this was like Australia, Russia, China. These were the only three major economies that grew. Other than that, the slump in the Indian economy has been steeper than the slump in other major economies. And these would include countries like the United Kingdom, France, the 27 countries in the European Union, Germany, Japan, the United States, South Africa, Brazil. So the point is, in my opinion, and it's not just my opinion, a lot of other economists would share this opinion, the hurry manner and the hasty manner in which the lockdown was imposed from midnight of the 24th or should not have been done in the way it was. It should have been done in a far more calibrated manner. Please remember that the time the lockdown was imposed, there were barely 500 odd corona positive cases in the country. Today that number is over 3.6 million. These are the confirmed COVID cases. Already we've seen over 64,000 deaths, including the former president of India, Pranabukkaji. So the situation was, in a sense, it was almost inevitable. And I really am amazed how some government economists and some supporters of the ruling dispensation are perpetually in a state of denial. I mean, the fact is, India is going through a very, very deep recession. We can debate as to how long it is going to last, how steep the decline would be. But to deny that you're in a recession would be like living in a fool's paradise. Let's get some of the statistics which have come out. Private spending, which accounts for over half of our GDP, about 55, 56%, it's come down by almost 27%. Government spending has gone up by about 24%, but government spending only accounted for 18% of our GDP. Our investments have gone down, gross fixed capital formation have been down by almost half, 48%. Unemployment has been on the rise. The Center for Monitoring Indian Economy said it's sold to 23% in April. That is one out of four Indians. Almost one out of four Indians was unemployed that month in April. And then this number came down to 11% in June, by which time the harvesting had begun and about 8.3% at the end of August. The government clearly failed to put enough money in the hands of people. Despite some transfers that were made through the Jandhan accounts to women, the fact is we've seen a terrible situation and this situation is continuing. The decline in the manufacturing sector has been almost 40%, 39%. The decline in construction activities, it's halved. Trade, hospitality, commerce has been down by almost half, 47%. Mining and quarrying down by 20%. The only saving grace is agriculture, which is grown by about 3.4%. But agriculture is a relatively small portion of our Indian GDP. So what we are looking at is a huge shock that the Indian economy has received on account of the very harsh manner in which the lockdown was imposed. And I really don't know how long the impact is going to last. And the government's own statistics, however flawed or inadequate they may be, confirms that this indeed is the situation. Absolutely. And Paranjee, so we have a series of factors here. One, as you've put it, there's been the lockdown induced shock to the economy. Two, again, like you said, considering that the number of cases is continuing to rise, considering that right now we are leaders in terms of the number of COVID-19 cases. The impact is not likely to suddenly cease anytime soon. So we're going to see a continuing impact even in the coming months. And above all, there's a larger aspect that this is not a one-time decline, but something that has been happening for quite some time. So the GDP has been declining over various quarters over the past two years. So it's not a sudden dip after a series of growth or whatever. And like you said, key sectors like manufacturing also have been facing a decline. So all of this seems to indicate a larger bankruptcy in economic thinking as far as the government is concerned and planning as well. So could you maybe talk a bit about that aspect in terms of why is the government without answers to this kind of a situation? And not just the pandemic, but something a longer time period as well. The Narendra Modi government has a track record of using sudden, shock and awe tactics all ostensibly meant to improve the state of the economy. I mean, look what happened in November 2016, demonetization. It was a huge shock to the economy. The government refused to acknowledge that. And the impact was felt for many, many years. The hurried and botched up manner in which the goods and services tax was implemented is another example of how this government is completely apathetic to consultations with experts and others. In the lockdown, we've seen the states, the governments of the states that are supposed to implement all the relief packages, all the major rehabilitation packages meant they are the ones who are supposed to rehabilitate all the migrant workers. They have been so badly squeezed for funds. The union government has not been able to give the revenues that were promised for the goods and services tax. And instead they're telling them borrow, borrow, borrow more. The so-called 20 lakh crore project announced in five phases by finance minister Nirmala Sitaraman. I mean, out of the 20 lakh crores, 18 lakh crores were old schemes. They were recycled and made to appear as if there were new schemes. No, they were not. And most of them were schemes that were already in under implementation or telling people to borrow. And then the additionality was just about 2 lakh crores, which in a country which had a GDP of 200 lakh crores, that was 1% of GDP. Now, the story doesn't end there. Now, you are completely in a state of denial as to what should be done. And you seem to have not, I mean, the government does not seem to have the focused idea. It should be printing, it should be spending money. Even the Reserve Bank of India actually has been seeing all this. Instead, the government in its desperation to raise resources has been privatizing with the vengeance, selling assets that belong to the people of this country and painting it out as if this is the way forward in this kind of a deep recessionary condition that the country is going through. The corporate conglomerates headed by the two richest men in India, Mr. Mukesh Ambani and Mr. Gautam Atani, they seem to be doing rather well. Everybody else is in a mess. All of it indicates how bankrupt, how ideologically biased this government's economic policy regime is. And I regret to say this, all of which has very, very negative consequences for the country. It's going to sharpen and widen an already extremely unequal society. And despite paying lip service to the conditions of the poor and the migrant workers, the government seems to have done little or nothing to alleviate their miseries. I mean, in the months of April, May and June, we saw the kind of internal migration that's never been seen in the history of this country, perhaps never in the history of humankind. Even in the mid 40s, when the subcontinent was partitioned, you had about one and a half crores of about 15 million people possibly displaced. We've had many more people who have migrated from different parts of the country in the months of April, May and June. But what do you, when the government just refuses to look at the reality on the ground, refuses to consult not just its ideological opponents, but experts, believing it sort of knows it all. And it's unfortunate, but true, that I do not see the economic situation improving significantly in the near future. Thank you so much, Konrad, for talking to us. Thank you, Prashant. That's all we have time for today. We'll be back tomorrow with major news developments from the country. Until then, keep watching NewsClick.