Government Projects GDP contraction 7.7% in FY21

The Government has released the first advanced estimates (AE) of the National Income. According to National Statistical Office (NSO), it is projected that almost all sectors, apart from agriculture, to see contraction.

The economy is expected to contract by 7.7 per cent in the current financial year (2020-2021). This is in line with the Reserve Bank of India (RBI) forecast of (-) 7.5 per cent. However, it is lower than the projections made by various global agencies.

The Asian Development Bank has projected a contraction of 8 per cent, while the World Bank sees the economy shrinking 9.6 per cent. Goldman Sachs estimated a 10.3 per cent contraction while Moody’s expects a de growth of 10.6 per cent.

As per the data released by the Ministry of Statistics and Programme Implementation (MOSPI). “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 May 31, 2020. The growth in real GDP during 2020-21 is estimated at -7.7 per cent as compared to the growth rate of 4.2 per cent in 2019-20.”

The government will release second advance estimates of National Income for the year 2020-21 and quarterly GDP estimate for the quarter October-December, 2020 (Q3 of 2020-21) on 26th February, 2021.

GDP trends (shown below)

Government Projects GDP contraction 7.7% in FY21

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