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GS-III : Economic Issues GDP/GNP

29 March, 2021
Min Read

Revival in Lockdown-caused-contraction in GDP

Revival in Lockdown-caused-contraction in GDP

Advance Estimates of National Income project 8% Contraction in GDP.
For the fiscal year 2020-21, GDP contraction is estimated at 8.5 per cent by World Bank as against a growth of 4 per cent during FY 2019-20.

The general government deficit is expected to remain above 10% of GDP until FY22.

NSO revised 1^stquarter GDP shrinkage to 24.4% from 23.9%.
After reaching 8.3% in FY17, growth decelerated to 4.0 per cent in FY20. The slowdown was caused by a decline in private consumption growth and shocks to the financial sector (the collapse of a large non-bank finance institution)
Government spending, public administration, defence and other services contracted.
Services like Retail, trade, hotels, transport and communication contracted 7.7%.
Informal sector, Microenterprises, contact intensive services, stress in employment Reflect no recovery in job sector.
The most impacted sub-sectors included aviation and tourism, hospitality, trade, and construction, but industrial activity was also deeply disrupted by mobility restrictions. Agriculture, however, was mostly unaffected.

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???????Slow Revival:

The World Bank has estimated India’s GDP (Gross Domestic Product) growth to be in range of 7.5 to 12.5 per cent during FY 2021-22 (FY 22).
As growth resumes and the labour market prospects improve. “The poverty rate is projected to return to pre-pandemic levels in FY22, falling within 6% and 9% , and fall further to between 4% and 7% by FY24 (FY 2023-24).
Manufacturing and Construction resurfaced from collapse to expand 1.2% & 6% respectively.
Feeble growth in GDP by0.4% and GVA by 1% in late 2020.

Source: Buisnessline TH

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