New Delhi: The COVID-19 pandemic battered fiscal year, 2020-21, is expected to be the worst-ever for India’s Gross Domestic Product (GDP), with the government’s first official advance estimates suggesting a real contraction of 7.7 percent, as compared to the 11-year-low growth rate of 4.2 percent in FY20.
In the data, released by the National Statistical Office (NSO) on Thursday, agriculture is projected to grow at 3.4 percent in FY21 and manufacturing to contract 9.4 percent.
Trade, hotel, and transport in the services sector are projected to contract 21.4 percent, the NSO said.
The projections, following a contraction of nearly 24 percent in the first quarter (April-June) and 7.5 percent in the second (July-September), reflect the slowdown affected by the pandemic and the economic impact of months-long nationwide lockdown. India’s GDP shrank 15.7 percent in the first two quarters (April-September).
While the Reserve Bank of India (RBI) pegged GDP contraction in FY21 at 7.5 percent, the World Bank sees the economy shrinking by 9.6 percent this year.
In its Global Economic Prospects report, the Bank said the informal sector, which accounts for four-fifths of employment, had been subject to severe income losses during the pandemic.
“In India, the pandemic hit the economy at a time when growth was already decelerating. The output is estimated to contract by 9.6 percent in the fiscal year 2020-21, reflecting a sharp drop in household spending and private investment,” it said.
The NSO’s First Advance Estimate is expected to be a guideline for Finance Minister Nirmala Sitharaman to prepare the Union Budget for 2021-22, to be presented on February 1. The NSO’s advance estimates had accurately projected the real GDP rate in three of the past 12 years.
(VP)
