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The economy contracts 23.9% in the first quarter: this is how the different sectors fared


NEW DELHI: Gross Domestic Product (GDP) figures for the first quarter (Q1) ending June 30 released on Monday show the largest contraction in India’s economic growth at 23.9 percent. The nationwide lockdown on March 25, 2020 to curb the spread of Covid-19 infections has negatively affected all sectors of the economy.
While the manufacturing and construction sectors contracted by a whopping 39.3% and 50.3% respectively, agriculture was the only outlier among all.
Additionally, continuing restrictions on transportation, educational institutions, and restaurants have affected hospitality, industry, services, and other sectors.
Here are the numbers by sector:
* Manufacturing
The manufacturing sector witnessed a sharp contraction of 39.3 percent in the first quarter of fiscal 2020-21. The sector has faced a recession for the past four months, as demand conditions remained subdued amid prolonged shutdowns. Companies also reduced both staffing and purchasing activities in the wake of the closures. The Purchasing Managers Index (PMI) for July was 46, compared to 47.2 in June.
* Building
With the country under lockdown for more than 60 days during the quarter, the construction sector witnessed a huge 50.3% drop. The sector faced severe labor shortages as migrant workers returned to their places of origin in large numbers as activities stalled.
* Mining and Quarries
The mining and metals sector fell about 23.3 percent during the first quarter as high cost of raw materials, cash flow constraints and declining demand affected sales.
* Commerce, hotels, transport and communications
Covid has seriously affected the hotel industry. With international borders sealed around the world and fear of travel adding to the problems, the sector witnessed a sharp 47% drop in its activities during the first quarter.
* Industries
The manufacturing sector fell 38.1 percent in the first quarter of fiscal year 21 in large part due to the closure of business activities across the country.

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