The Central Statistical Office (CSO) announced India’s Gross Domestic Product (GDP) figures in the 4th quarter of the financial year 2020-21. In the final quarter of the year, that is, January-March, the growth rate of Gross Domestic Product (GDP) is 1.6%.
India saw a contraction in its economy by 7.3% in the financial year 2020-21. As per the government estimates in February this year, India’s real GDP during 2020-21 was estimated at -8%. Though marginal, India’s GDP in the 4th quarter is roughly better than the previous estimates.
According to data released by the National Statistical Office (NSO) the gross domestic product (GDP) grew by 3 percent in the January-March period of 2019-20. Gross value added (GVA) growth in the manufacturing sector grew 6.9 percent in the fourth quarter of 2020-21 compared to a -4.2 percent in the previous financial year.
Farm sector growth was down at 3.1% compared to 6.8% in the corresponding financial year 2019-20.
The construction sector GVA grew while the mining sector shrank by 5.7%.
Basic necessities like electricity, water supply, and other utility services expanded by 9.1% in Q4 compared to a 2.6% expansion a year ago. Hotel, transportation and other services contracted in the 4th quarter.
The inference of these projected numbers for the growth prospects for FY21 depends primarily on the base effect of these estimates. GDP contraction in the economy is low that hints at the sharp recovery of the Indian economy.
Chief Economic Adviser (CEA) K.V. Subramanian said that the effect of the second wave of Coronavirus is not likely to be serious. There is however quite an uncertainty over the possibility of double-digit growth in the financial year.
The CEA also said that now that the coronavirus pandemic is still adversely affecting the Indian economy further economic forecasts will not be prudent. Economic growth will depend on the severity of the pandemic in the nation. K. V. Subramanian said, “Whether or not that will be double-digit or single-digit there is uncertainty because scientists are also talking of a possibility of a third wave.”