As part of its first advance growth estimates, the government said on Thursday that India’s economy could shrink by 7.7 per cent during the 2020-21 financial year (FY21), compared to 4.2 per cent growth in FY20. The government added that the contraction was due to the nationwide lockdown imposed in March 2020 amid the Covid-19 pandemic. This touches a new low in four decades. The National Statistical Office (NSO) figures show a contraction in almost all sectors, except agriculture. “Real GDP or GDP at constant prices (2011-12) in 2020-21 is likely to attain Rs.134.40 lakh crore levels, down 7.7 per cent compared to Rs.145.66 lakh crore in 2019-20,” the NSO said, adding while the Covid-19 restrictions have been gradually lifted, there was an impact on economic activities as well as on data collection mechanisms.
In the current fiscal, the manufacturing sector may see a contraction of 9.4 per cent, while growth was almost flat at 0.03 per cent in the year-ago period. However, the NSO also estimates a significant contraction in mining and quarrying, and trade, hotels, transport, communications and services related to broadcasting. Economists and India Inc said the last few months had seen recovery and hoped the momentum will continue. CII director-general Chandrajit Banerjee felt it the decline was “much shallower than expected”. And the Nominal GDP is expected to be contracted by 4.2% in the current fiscal.