GDP estimated to contract by 7.7% during FY20-21

GDP estimated to contract by 7.7% during FY20-21

"Real GDP or GDP at Constant Prices (2011-12) in the year 2020-21 is likely to attain a level of Rs. 134.40 lakh crore, as against the Provisional Estimate of GDP for the year 2019-20 of Rs. 145.66 lakh crore, released on 31st May 2020", the MoSPI release said.

On the demand side, it said real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8 per cent.

In the manufacturing sector, electricity sector is estimated to register a growth of 2.7 per cent, the data showed.

The growth in the agriculture, forestry and fishing; mining and quarrying; manufacturing and construction is estimated to be 3.4 per cent, (-) 12.4 per cent, (-) 9.4 per cent and (-) 12.6 percent, respectively.

Notably, the 7.7 per cent contraction in the GDP is a big blow to the economy of the country as compared with the 4.2 per cent growth recorded in 2019-20. The economy had grown 4.2 per cent a year ago. Considering that the economy contracted by 15.7 per cent in the first half of the year, these numbers suggest that the NSO believes that in the second half of the year, the economy would be at nearly the same level as it was last year.

NSO said in wake of the pandemic, the data challenges in the case of other underlying macroeconomic indicators like the IIP and CPI used in the estimation of National Accounts aggregates, will also have implications on these estimates.

No Evidence Of Bird Flu Transmission To Humans Yet
Mumbai: At least 16 birds were found dead at Vijay Garden Society, Kavesar and Hill Garden, Kokanipada in Thane today (January 6). Kumar said that directions have been issued to implement controlling measures as soon as even one case of bird flu is reported.

India Ratings and Research Principal Economist Sunil Kumar Sinha said, "Although the headwinds emanating from COVID-19 related challenges are unlikely to go away till mass vaccination becomes a reality, we believe economic agents at least in the non-contact intensive sector appears to be gradually learning to live with it and economic activities are adjusting swiftly to the post COVID-19 world".

The Centre's fiscal deficit had widened to 135 per cent of the full-year's Budget Estimates at Rs 10.7 trillion in the first eight months of FY21.

The Reserve Bank of India (RBI) expects the economy to post a 0.1% growth in the December quarter and a 0.7% expansion in the March quarter to end fiscal 2021 with a 7.5% contraction. Many of them forecast an uptick in tax collections in the second half of the fiscal year.

What is particularly worrying is that the nominal GDP - which is calculated at current prices - will contract by 4.2 per cent. Agriculture, the only sector which displayed positive growth during H1, is expected to stay on positive growth trajectory in the future as well, the report said. It said the estimates are likely to undergo sharp revision.

"The relatively more manageable pandemic situation in the country as compared to advanced nations has further added momentum to the economic recovery", the ministry added.

The per capita net national income (NNI) at current prices is estimated at Rs 1,26,968, showing a contraction of 5.4 per cent, as compared to Rs 1,34,226 during 2019-20 with a growth rate of 6.1 per cent.

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