The breakout of the pandemic and the global economic depression has almost sown a seed of curiousness amongst all of us to inquire more about the GDP of our nation. But have we ever made an effort to know about the recession history of India in the past 70 years. The long span of 7 decades post-independence was no cakewalk for the nation. This article will undrape all the past recessions in India after Independence. So stay tuned and enlighten yourself with reliable information.
Interpreting the term “Recession”:
As we all know that Japan is the first nation in the world to have officially entered the recession. And the further updates have also revealed a statement by Goldman Sachs according to which the Indian economy will contract to 5% in the financial year 2020.
Recession is officially considered to be the economic condition of the nation where the GDP growth rate is negative for two quarters consecutively. But other organizations have come up with a different interpretation of the term recession. National Bureau of Economic Research (NBER) asserts that recession is a period in which there is a depression in the total income, trade as well as employment which might last from a span of 6 months to a year.
History of negative GDP growth rate (Recession) in India post-independence
India has seen a recession for quite a time. The recession has hit the economic condition of India for our times. The first case was in 1957-58 where the growth rate went to -1.2%. This period was the pre-liberalization period. The second case took place in the year 1965-1666 where the growth rate again went to -3.2%. In the year 1972-1973, India again has to enter into recession and it had slightest of declination in the rate of growth of GDP which was -0.3%. And in the year 1979-1980, Idi again went into recession by -5.2% GDP growth which had a momentous impact.
Reason for the retardation of GDP growth:
Going through the above history of the recession, many questions might be popping up in your mind. You might be wondering what can be the reason behind the fall of the GDP. This section will get you all your answers. If we consider the recessions in the Indian economy before the year 1991 then we can conclude with the reason that the period was pre-liberalization where there were oil price shocks. Along with that droughts were also contributing to the decline of the GDP growth of the nation as the era was pre-green revolution period. Above all, the wars against neighboring nations like China and Pakistan also drained the nation economically to a considerable extent.
The recession might even hit us again but what’s interesting about the declination in the rate of GDP is that the very next year the nation grabs its pace and there is an assent of GDP growth observable again.