Service Sector Contraction Unprecedented In Indian History: RBI Report

RBI Annual Report: On the industrial sector, the central bank said that gross value addedgrowth in the industry contracted sharply by 7.4 per cent.

The Reserve Bank of India has described the contraction in the service sector during 2020-21 as "unprecedented in Independent India's history", observing that even during the global financial crisis, it had remained resilient. "The contraction in the services sector in 2020-21 is unprecedented in independent India's history. Even during the global financial crisis, the services sector remained resilient. In 2020-21, however, construction suffered in the aftermath of the pandemic due to an inventory overhang in residential housing, coupled with stressed liquidity conditions which restricted new launches. The situation was exacerbated by imposed social distancing norms which led to construction activity in the first quarter of 2020-21 getting reduced by half year-on-year," the central bank has noted in its annual report for 2020-21. Industrial sector downturn On the industrial sector, the central bank said that the gross value added growth in the industry contracted sharply on a year-on-year basis by 7.4 per cent in 2020-21.