In the first quarter of fiscal year 2020-21, GDP contracted by 23·9 percent and in the second quarter, by 7·5 percent. The Economic Survey, 2020-21 preferred to call it a recovery in

Correct — B, V-shape. The two numbers in the stem are lifted straight from the Economic Survey 2020-21, and so is the answer. Chapter 1 of the Survey says in terms that while there was a 23.9 per cent contraction in GDP in the first quarter, the recovery has been a V-shaped one as seen in the 7.5 per cent decline in the second quarter and the recovery across all key economic indicators. A section heading in the same chapter reads that the V-shaped economic recovery came about because of a timely and stringent lockdown, and the Survey's preface repeats the phrase. The reasoning behind the letter is the shape of the path itself — a very deep fall followed immediately by a sharp climb back, with no long flat floor in between.

• (a)U-shape — A U-shaped recovery has a long flat bottom — output falls, stays down for several quarters, then rises. The Indian series moved from minus 23.9 to minus 7.5 in a single quarter, which is a turn, not a floor.
• (c)K-shape — A K-shaped recovery describes parts of the economy rising while others keep falling. Commentators did use that word about India, particularly about formal against informal employment, but the Survey itself argued the opposite and did not use it.
• (d)W-shape — A W-shaped recovery means a double dip — a rebound followed by a second contraction. The Survey was written before any second wave and describes a single turn upward, not two falls.

Economists describe recoveries by the letter their output path traces. A V is a sharp fall followed by an equally sharp rise; a U adds a long trough; a W is a rebound cut short by a second fall; a K is not one path at all but two, one rising and one still falling, and is used when the aggregate hides very unequal outcomes. Economic Survey 2020-21, tabled on 29 January 2021, made the V its central claim and tied it to the argument that an early and strict lockdown saved both lives and livelihoods.

This is one of those items where the stem tells you where to look. The two figures quoted, minus 23.9 per cent and minus 7.5 per cent, appear together in exactly one well-known sentence, and that sentence contains the answer word. Read as economics rather than as recall, the argument is that the second quarter's much smaller fall, together with a broad-based pickup in the high-frequency indicators the Survey tracked, showed the turn had already happened. Anchored to the January 2021 date, the claim is what the Survey said. Since then the picture has filled in: the full year 2020-21 still ended in contraction, a second wave arrived in April and May 2021 before the Survey's forecast horizon had run out, and growth resumed from 2021-22 onwards. The debate over whether the recovery was as even as a single V suggests continued well after the exam.

• Economic Survey 2020-21 was tabled on 29 January 2021, a day before the Union Budget for 2021-22.
• Its own words are that the recovery has been a V-shaped one, seen in the 7.5 per cent decline in the second quarter after the 23.9 per cent contraction in the first.
• The Survey's central theme was that an early and stringent lockdown was responsible for both the health and the economic outcome.
• A V-shape means a sharp fall and an equally sharp rebound; a U adds a prolonged trough; a W is a double dip.
• A K-shape describes divergence between parts of an economy rather than a single aggregate path.

• Choosing K because the term was widely used in commentary. The question asks what the Survey preferred to call it.
• Confusing the Economic Survey's assessment with the actual outturn for the full year, which was still a contraction.
• Reading the second quarter's minus 7.5 per cent as growth. It is a smaller fall, and the improvement between the two quarters is what makes the V.

As a term-to-definition item on recovery shapes, as a question on what a particular Economic Survey argued, or through the quarterly GDP figures themselves.

No directly related past PYQ was found.

• practice — not a real PYQ

  A recovery in which output rebounds and then falls again before recovering a second time is described as

  • (a)V-shaped
  • (b)U-shaped
  • (c)W-shaped
  • (d)L-shaped

  Answer(c) W-shaped — the double dip; a V has a single turn and a U a long trough.

• practice — not a real PYQ

  The Economic Survey of India is presented by which ministry?

  • (a)Ministry of Commerce and Industry
  • (b)Ministry of Finance
  • (c)Ministry of Statistics and Programme Implementation
  • (d)NITI Aayog

  Answer(b) Ministry of Finance — prepared by the Department of Economic Affairs under the Chief Economic Adviser and tabled before the Union Budget.