India’s GDP may contract 7.7% in FY21: Govt
India’s economic growth is expected to contract over 7 percent in 2020-21 due to the impact of the economic distress caused by the coronavirus pandemic during the year.
The first advance estimates of economic growth released by the government show that the economy is likely to contract 7.7 percent in the current fiscal year. The 7.7 percent contraction is a big blow to the economy when compared with the 4.2 percent growth recorded in 2019-20.
According to the advanced estimates of the national income released by the National Statistical Office (NSO), there was a contraction in almost all the sectors except agriculture. The manufacturing sector has been predicted to annually contract 9.4 percent.
The Ministry of Statistics & Programme Implementation said in an official release that the lockdown and restrictions imposed in the current fiscal hurt the economy.
"With a view to containing the spread of the Covid-19 pandemic, certain restrictions were imposed from 25 March 2020. Though the restrictions have been gradually lifted, there has been an impact on the economic activities as well as on the data collection mechanisms. Estimates are therefore likely to undergo sharp revisions for the aforesaid causes in due course, as per the release calendar," the release said.
"Users should take this into consideration when interpreting the figures. The release of Second Advance Estimates of National Income for the year 2020-21 and quarterly GDP estimate for the quarter October-December, 2020 (Q3 of 2020-21) will be on 26.02.2021," it added.
It may be recalled that India's economy shrank by a staggering 23.9 percent in the first quarter of 2020-21 as the entire country went under a strict lockdown to contain the spread of coronavirus. The economy recovered sharply in the second quarter but contracted 7.5 percent.