India’s GDP Shrinks 7.3% in FY21 But Shows Growth by 1.6% in Q4

GDP drops in FY21 but shows a rise in Q4…learn more…

Tuesday, 1st June 2021

India’s Gross Domestic Product (GDP) diminished by 7.3% in the year 2020-21 according to data released on Monday by the National Statistical Office. The outcome is slightly better given the fact that the contraction projected earlier was 8%. The country’s GDP growth before the onset of the pandemic, in the FY 2019-20 was 4%.

However, although this is India’s worst performance for the economy, some of the damage seems to have got attenuated with the fourth quarter results of 2020-21 which, at 1.6% is more than what was anticipated.

This positive trend was the second time in a row after the country had faced a bleak first half and a technical recession due to the effects of Covid-19.

According to a statement by the Ministry of Statistics & Programme Implementation (MoSPI) on Monday, “GDP at Constant (2011-12) Prices in Q4 of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 percent”.

The Ministry also said that they are now expecting the real GDP at constant (2011-12) prices in 2020-21 to gain a level of Rs 135.13 lakh crore against the first revised estimate of GDP for 2019-20 of Rs 145.69 lakh crore.

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They added that at current prices, GDP in 2020-21 is estimated at Rs 197.46 lakh crore as opposed to the first revised estimates of Rs 203.51 lakh crore in 2019-20, indicating a downward slide of -3.0 per cent when compared to the 7.8 percent growth in 2019-20.

The second wave of Covid-19 in the country has wreaked havoc to an economy that was beginning to slowly raise its head by showing signs of improvement as compared to the previous quarters. It has compelled economy foretellers to slash their GDP projections for both Q4 and Q1 of FY22.

Hence, even though several analysts have forecasted a double-digit growth in FY22, the pandemic along with state-wise lockdowns to curb the rampant spread of infection, have led them to bring in revisions in their estimates. For the first quarter of 2021-22, median forecasts are of 21.6 per cent, which is lower than what was predicted earlier, 23 per cent.

Imposition of prolonged lockdowns and subsequent shutting down of the economy, albeit at state levels, has left millions jobless and a staggering number of small businesses to close down.

The News Talkie Bureau

Source:

Economictimes Indiatimes