The Indian economy will contract 7.7 per cent in financial year 2020-21 from 4.2 per cent in 2019-20, according to government estimates, due to the impact of COVID-19 pandemic.
Compared with the growth in the previous fiscal, this suggests a big blow to the country’s economy, which, the ministry of statistics and programme implementation said in a release, was affected by the restrictions imposed to contain the pandemic in the current fiscal.
According to the first advanced estimates of national income released by the National Statistical Office (NSO) on Thursday, contraction was seen in almost all sectors except agriculture, which is estimated to see a growth of 3.4 per cent in 2020-21, but still lower than the 4 per cent growth recorded in 2019-20.
“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… 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,” it said.
Manufacturing sector is likely to see a 9.4 per cent contraction in current fiscal whereas growth was almost flat at 0.03 per cent in the year-ago period. The NSO also estimates significant contraction in “mining and quarrying”, and “trade, hotels, transport, communication and services related to broadcasting.”
The economy contracted 23.9 per cent in the first quarter and 7.5 per cent in the second quarter.
The ministry said that the 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) will be released on February 26, 2021.