India's economy shrank by 23.9 percent between April and June, the worst contraction on record since New Delhi started publishing quarterly statistics, government data showed on Monday.
The steep dip in Asia's third-largest economy in the June-ended quarter reflected the impact of a months-long nationwide shutdown that saw most industrial and manufacturing activity grind to a halt.
The coronavirus lockdown is largely to blame. India has reported more than 3.5 million cases of COVID-19 - third behind only the United States and Brazil.
Continuing restrictions on transport, educational institutions and restaurants - and weekly lockdowns in some states - have hit manufacturing, services and retail sales, while keeping millions of workers out of jobs.
Shilan Shah, India economist at Capital Economics, Singapore, said in a note on Friday the economic damage caused by pandemic-related lockdowns was much worse in India than any other country in Asia.
"Timely indicators show that the post-lockdown recovery is now stalling, underscoring the long and difficult road ahead for India's economy," said Shah.
Some private economists said the fiscal year that began in April could see a contraction of nearly 10 percent, the worst performance since India won independence from British colonial rule in 1947.
Prime Minister Narendra Modi's government announced a $266bn stimulus package in May, including credit guarantees on bank loans and free food grains to poor people, but consumer demand and manufacturing are yet to recover.
The Reserve Bank of India has reduced the benchmark repo rate - the rate at which it lends money to commercial banks - by a total of 115 basis points since February and kept rates on hold in August amid rising inflation.
Policymakers said federal and state governments are unable to increase spending, following a more than 40 percent fall in tax receipts in the June quarter.
However, following normal monsoon rains the farm sector, which accounts for 15 percent of economic output, may give hope that rural economy will be able to support millions of migrant workers, who returned to their villages from the cities when the lockdown began.
