Indian Economy Shrinks By 24% As The Country Sees Its Highest Coronavirus Numbers

With the coronavirus spreading faster in India than anywhere in the world, the Indian government on Monday announced the country's biggest economic contraction in 24 years.

India's National Statistical Office said the economy contracted by 23.9% in the first quarter of the 2020-2021 fiscal year, which ended in June, compared with the same quarter the previous year. That's its worst performance since the government began publishing quarterly gross domestic product figures in 1996. And it's the worst decline among the world's major economies releasing GDP figures for that same quarter, according to data from the Organization for Economic Cooperation and Development.

"This year, we are facing an extraordinary situation," India's finance minister, Nirmala Sitharaman, told a conference last week before the GDP figures were released. "We are facing an act of God."

Even before the pandemic hit, India's economy was already ailing. In 2016, the government took 85% of paper money out of circulation as part of a demonetization policy that aimed to tamp corruption but also hurt small, cash-run businesses. The following year, a new goods and services tax scheme aimed to simplify the tax code but also hurt big manufacturers. Last year, unemployment hit a four-decade high.