Amid coronavirus pandemic, India’s gross domestic product (GDP) grew at 1.6 per cent in the January-March quarter of fiscal year 2020-21, but witnessed a contraction of 7.3 per cent for all of the fiscal year, showed government data on Monday.
This is the second one straight quarter of expansion since India exited a infrequent recession.
India’s GDP figures showed the growth at 3 per cent in Q4 of FY20, while growth for FY20 came at 4 per cent, an 11-year low.
“Real GDP or Gross Domestic Product (GDP) at Fixed (2011-12) Prices in the year 2020-21 is now estimated to attain a level of ₹135.13 trillion, as against the First Revised Estimate of GDP for the year 2019-20 of ₹145.69 trillion, released on 29th January 2021. The growth in GDP all the way through 2020-21 is estimated at -7.3 per cent as in comparison to 4.0 per cent in 2019-20,” said Ministry of Statistics & Programme Implementation in a remark.
The economy snapped out of technical recession in the October-December quarter of the financial year 2020-21 and expanded by a revised 0.5 per cent, after reporting two consecutive quarters of de-growth in the same fiscal. The GDP contracted by 7.3 per cent in the September quarter (second quarter) of the fiscal year 2020-21. The next release of quarterly GDP estimates for the quarter April-June 2022 (Q1FY22) will be on August 31, 2021.
The Reserve Bank of India (RBI) Governor-led Shaktikanta Das Monetary Policy Committee, in its first bi-monthly monetary policy review for the new financial year 2021-22, retained its GDP growth projection at 10.5 per cent in the current fiscal 2021-22.
Leading domestic credit rating agency ICRA pegged the GDP growth for the March quarter at around two per cent, and indicated that the economy could register a contraction of around 7.3 per cent for all of the fiscal 2020-21. The agency’s growth projection is higher than the eight per cent contraction pegged by the National Statistical Office.
The State Bank of India (SBI), in its recent research outline titled ‘SBI Ecowrap’, pegged the GDP growth for the March quarter at 1.3 per cent, with a downward bias. The state-run bank expects the GDP decline for the full fiscal year 2020-21 to be around 7.3 per cent, in comparison to the earlier prediction of a 7.4 per cent contraction.
The second one wave of infections and deaths across the world’s second-hardest hit country has caused forecasters to trim their projections for the coming months.
The median forecast for April-June growth is 21.6%, down from a month-earlier estimate of 23% after the resurgence prompted most industrial states to impose lockdowns, throwing millions out of work, reported Reuters. For the fiscal year to March 2022, economists cut their median forecast to 9.8% from 10.4%.
The economy, which was once facing a slowdown even before the pandemic, now confronts a crash of consumer demand – constituting over 55% of the economy – as household incomes and jobs have declined.
Unemployment soared to a close one-year high of 14.73% in the week ending May 23, according to the Centre for Monitoring Indian Economy, a Mumbai-based private think tank.
Finance Minister Nirmala Sitharaman, who said on Friday that no decision has been taken for another stimulus package, has limited space because of a fall in tax collections and rising public debt.
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