India's GDP to contract by 7.7% for FY 20-21 estimates Centre; hit by year-long pandemic

With year-long COVID-19 pandemic hitting Indian ecomy hardest, Ministry of Statistics & Programme Implementation, on Thursday, estimated that India's GDP will be -7.7% for FY 20-21 - lowest till date. In comparison, India's overall FY 19-20 GDP stood at 4.2% - an 11-year low. As per National Council for Applied Ecomic Research (NCAER), India is set to see a marginally positive 0.1% growth in third quarter.

India's GDP crashes to -23.9% in Q1- FY21 due to COVID-19; worst contraction till date

India's GDP to contract by 7.7% in FY 20-21

NCAER adjusted its forecast as per ongoing fiscal to -7.3% compared to -12.6% in September to account for sharp moderation in contraction in second quarter at -7.5%, as per reports. Indicators across industry and services like goods and services tax (GST) collections, GST e-way bills, Index of Industrial Production and Purchasing Manrs’ Index have moderated pace of recovery after September-October uptick, said Bornali Bhandari, in its mid-year review of ecomy. Fitch Ratings, on or hand, has raised India's GDP forecast to -9.4 per cent in current fiscal year to March 2021 from a previously projected contraction of 10.5 per cent.

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Indian ecomy enters recession with -7.5% GDP

Marking its worst contraction in history, India's GDP growth for first quarter of FY 21 stood at -23.9% as per data released by National Statistical Office (NSO) on August 31. This contraction came after overall FY 19-20 GDP growth stood at 4.2%, hitting an 11-year low. As per market reports, core sectors' growth stood at: Industries at -381%, Services at -20.6%, Manufacturing at -39.3 %, Trade, Hotels at -47%. Agriculture has been only sector to see growth clocking a 3.4% increase, due to rural sector remaining mostly free from lockdown. At this point, CRISIL had predicted that India's fourth recession since independence, first since liberalisation and perhaps worst to date, is here.

Fitch revises India GDP forecast, sees contraction at 9.4 pc

Subsequently, in second quarter of FY 21, India's GDP contracted at -7.5% - plunging nation into recession with two successive quarters of contraction. In this quarter, sectors such as agriculture, forestry and fishing (3.4%), manufacturing (0.6%) and electricity, gas, water supply and or utility services (4.4%) have recorded a positive GDP growth. pace of contraction was slower than estimates, claimed analysts. faster rate of ecomic recovery showed 'revival of both consumption and investment', stated Ministry of Finance.

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