India clocked a negative growth of 7.3% for 2020-21 as compared to 4.0% in 2019-20 while the fourth quarter of the fiscal showed a minimal rise of 1.6%.
Provisional estimates of annual national income and quarterly estimates released by the National Statistical Office (NSO) on Monday showed that the GDP numbers reflect the delicate state of the nation’s economy since the Centre had begun the ‘Unlock’ process from July 2020 onwards after imposing a nation-wide lockdown in March 2020, which had lasted till June 2020.
Amid a nationwide lockdown in 2020, the first quarter (April-June) had seen a contraction of 24.4% while the second quarter (July-September) saw a contraction of 8%. Data released in February had revealed that the Indian economy grew by 0.4 percent in October-December 2020.
Commenting on the figures, Chief Economic Adviser (CEA) KV Subramanian said that the growth was affected by the second wave of the pandemic.
The CSO had projected 8 per cent GDP contraction in FY21, implying a contraction of 1.1%t in March quarter. Meanwhile, the Reserve Bank of India had projected a 7.5% contraction for FY21. However, most of the analysts had expected the economy to bounce back at a better-than-expected pace in March quarter, and predicted that the FY21 contraction would be less than CSO’s projection of 8%.
“Needless to say, the economic outlook remains highly uncertain, and periodic material revisions to our growth forecasts may persist in FY2022, as was the case in FY2021,” Aditi Nayar, the chief economist at ICRA, said in a statement. “At present, we expect real GDP to expand in the range of 8-9.5% in FY2022.”
Moody’s Investors Service on Tuesday pegged India’s GDP growth at 9.3 percent in the current fiscal ending March 2022 and 7.9 percent in FY23.
“The reimposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity, but we do not expect the impact to be as severe as during the first wave,” it said.