New Delhi: India’s Gross Domestic Product (GDP) grew at 1.6 percent in the fourth (January-March) quarter of 2020-21, but witnessed a contraction of 7.3 percent for the entire fiscal year (FY21), media reported on Monday.
The Q4FY21 was the second straight quarter of expansion since India exited a rare recession.
India’s GDP figures showed the growth of 3 percent in Q4FY20, while growth for FY20 came at 4 percent, an 11-year low, according to the government data available on Monday.
“Real GDP or Gross Domestic Product (GDP) at Constant (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 during 2020-21 is estimated at -7.3 per cent as compared to 4.0 per cent in 2019-20,” said the Ministry of Statistics & Programme Implementation in a statement.
The sectoral performance in Q4FY21 reveals that there certainly was a recovery in sectors like manufacturing, construction, and finance, real estate etc, which would have boded well for FY22. However, with the second wave leading to a closedown of the services sector, in particular, progress might remain muted.
The economy snapped out of technical recession in the third (October-December) quarter of 2020-21 and expanded by a revised 0.5 percent, after reporting two consecutive quarters of negative growth in the same fiscal. The GDP contracted by 7.3 percent in the second quarter of FY21.
The Monetary Policy Committee, led by Reserve Bank of India (RBI) Governor Shaktikanta Das, in its first bi-monthly monetary policy review for 2021-22, retained its GDP growth projection at 10.5 percent in FY22.
Leading domestic credit rating agency ICRA pegged the GDP growth for the March quarter at around two percent, and indicated that the economy could register a contraction of around 7.3 per cent for the entire FY21. Its growth projection is higher than the 8 percent contraction pegged by the National Statistical Office (NSO).
The State Bank of India (SBI), in its recent research report titled ‘SBI Ecowrap’, pegged the GDP growth for the March quarter at 1.3 percent, with a downward trend. The state-run lender expects the GDP decline for the full FY21 at around 7.3 percent, compared to the earlier prediction of a 7.4 per cent contraction.
The second wave of infections and deaths across the world’s second-hardest hit country has caused some forecasters to trim their projections for the coming months.
The median forecast for the Q1FY22 growth is 21.6%, down from a month-old estimate of 23% after the resurgence prompted most industrial states to impose lockdowns, throwing millions out of work. For FY22, economists cut their median forecast from 10.4 percent to 9.8%.
Because of curtailed household incomes and unemployment, the Indian economy, which was facing a slowdown even before the pandemic, now confronts a reduced consumer demand, which comprises over 55% of the economy.
Unemployment soared to a near 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.
(VP)
