GDP likely to contract by 7.7% in 2020-21, says Govt.
The National Statistical Office said in its first advance estimate on Thursday.India’s economy is on course for the sharpest annual contraction on record, but the latest government estimates that The Indian economy is projected to contract by a record 7.7% in the year ending 31 March which is the first time in more than four decades.The forecast for the contraction is steeper than the 7.5% slump estimated by the country’s central bank.
By June quarter the shock caused Asia’s third-largest economy to shrink by almost a quarter ,As the result of restrictions the economic activity rebounded , with the pace of contraction slowing to 7.5% in the September quarter.The Union finance ministry in a statement said the advance estimates reflect a continued resurgence in economic activity in the fiscal third and fourth quarters and forecast a V-shaped recovery.
“The relatively more manageable pandemic situation in the country as compared to advanced nations has further added momentum to the economic recovery," the ministry said.The statistics ministry’s estimates expect the farm sector to grow at 3.4% in FY21 and the manufacturing sector to contract 9.4%.
Among services, the trade, hotel and transport sector is the worst affected and is expected to shrink 21.4%. suggest that the biggest challenges of the pandemic are behind it, with the economy expected to expand in the fiscal second-half