India recorded its worst-ever performance in over four decades, clocking a negative growth of 7.3% for 2020-21, with the fourth quarter of the fiscal showing a meagre rise of 1.6%.
The GDP figures provided by the National Statistical Office (NSO) on Monday indicate the fragile status of the nation’s economy, which is all the more evident given that the Centre began the ‘Unlock’ process in July 2020 after imposing a nationwide lockdown in March 2020 that lasted until June 2020.
The fourth-quarter results are all the more disappointing because, during the January-March period, all sectors were fully operational and the situation was near normal, yet a 1.6 per cent rise during the fourth quarter of FY21 reveals that everything is not well with the nation’s fiscal health.
Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices is now expected to reach 135.13 lakh crore in 2020-21, up from 145.69 lakh crore in the First Revised Estimate of GDP for 2019-20, announced on January 29th, 2021. GDP growth in 2020-21 is expected to be -7.3 per cent, down from 4.0 per cent in 2019-20, according to a news statement from the Ministry of Statistics and Programme Implementation. In 2019-20, the GDP grew by 4%, an 11-year low, owing primarily to deterioration in secondary industries like manufacturing and construction.
India‘s GDP fell by 24.38 per cent in the first quarter of 2020-21, owing primarily to the Covid-19 epidemic. On Monday evening, the Central Statistics Office (CSO) revealed the GDP figures for the January-March quarter for the fiscal year 2020-21.
India’s economy fell during the first half of FY21 due to the pandemic and the statewide lockdown imposed to stop the spread of illnesses, before rebounding to positive territory in the October-December quarter with a 0.4% gain. The GDP shrank by 24.38 per cent between April and June, improving to a 7.5% decline between July and September.
The CSO forecasted an 8% GDP contraction in FY21, meaning a 1.1% drop in the March quarter. Meanwhile, the Reserve Bank of India forecasted a 7.5% contraction in FY21. However, most analysts expected the economy to recover at a faster-than-anticipated rate in the March quarter, and predicted that the FY21 contraction would be less than the CSO’s prediction of 8%.
According to an SBI research report, India’s GDP was predicted to grow by 1.3 per cent in the January-March quarter, resulting in a 7.3% decrease in FY21.
(News input: NDTV Profit)