Contracting GDP!

A contracting GDP is a grave concern for the country. This is going to impact tax collections as well as overall well-being in the country. The Japanese brokerage Nomura has said after the contraction of 15.2% in June, the country does not seem to be poised for a positive GDP growth this year. The end result could be that we are heading for a negative GDP growth of about 6.1% this year, according to the analysis. In addition to the negative growth, we are also facing an inflationary market condition, particularly, in food and allied products. RBI has cut rates by 25 basis points to induce growth. But this could have supplementing impact on a growing inflationary trend which would hurt the already suffering low and middle class. Quoting the comment, they had said, RBI is likely to hit a pause at the upcoming policy review because of these confusing indicators.

https://economictimes.indiatimes.com/news/economy/indicators/nomura-estimates-indias-gdp-to-contract-by-6-1-in-fy21-sees-no-rate-cut-in-august/articleshow/77084970.cms