The International Monetary Fund (IMF) on Tuesday slashed its growth projection for India to 1.9% for financial year 2021 from 5.8% estimated in January, holding that the 'Great Lockdown' to combat the covid-19 outbreak will throw the world economy into the worst recession since the Great Depression in 1930s.
The coronavirus pandemic came at a time when India's economy was already slowing, due to persistent financial sector weaknesses. The severe disruption to economic activities by the covid-19, both through demand and supply shocks, has overtaken the incipient recovery in the Indian economy leading to massive job losses. IMF even expects FY20 growth at 4.2% as against 5% estimated by the statistics department.