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GDP estimates revised, expected to contract by 1.5% in current fiscal

GDP estimates revised, expected to contract by 1.5% in current fiscal

GDP estimates revised, expected to contract by 1.5% in current fiscal

BusinessToday.In
BusinessToday.In
  • Updated May 27, 2020, 8:48 PM IST
GDP estimates revised, expected to contract by 1.5% in current fiscal
1/10
The COVID-19-induced national shutdown since March 25, '20 and the resultant halt of commercial activity have severely dented the prospects of Indian economy. All sectors of the economy have been impacted, with varying degrees of severity. A large number of sectors across regions have not witnessed any activity for over 2 months as states have been in various stages of lockdown since early March '20.

Story: Shivani Sharma
Design: Mohsin Shaikh
GDP estimates revised, expected to contract by 1.5% in current fiscal
2/10
Several recent high frequency economic indicators point to a severe contraction in the overall economy since the imposition of the lockdown. The GDP is expected to contract by almost 1.5 per cent in the current fiscal.
GDP estimates revised, expected to contract by 1.5% in current fiscal
3/10
Agriculture growth has been retained at 2.5 per cent. Essential items like food grains were out of the purview of lockdown restrictions. Further, the prediction of a normal monsoon bodes well for Kharif crop output.
GDP estimates revised, expected to contract by 1.5% in current fiscal
4/10
The mining and quarrying sector will be under pressure and is expected to further contract by 3 per cent than our earlier estimate. Labor shortages are also expected to weigh in on the production in this sector.
GDP estimates revised, expected to contract by 1.5% in current fiscal
5/10
The manufacturing sector is expected to contract further by as much as 7 per cent from the earlier estimate of 3 per cent de-growth due to the extension of the lockdowns in most regions and the limited easing in some. The labour shortages would further exacerbate the condition.
GDP estimates revised, expected to contract by 1.5% in current fiscal
6/10
The electricity sector will see a zero growth in FY21 as against the 2 per cent estimated earlier as the demand for electricity has been adversely affected by the shutdown, viz by the commercial and industrial segments. Domestic demand would be higher but will not be able to compensate for the other two segments.
GDP estimates revised, expected to contract by 1.5% in current fiscal
7/10
Construction and real estate sectors both are expected to witness a further dip. A major challenge will be getting labour back on board and completing ongoing projects. The construction sector will see further de-growth of -8 per cent in FY21.
GDP estimates revised, expected to contract by 1.5% in current fiscal
8/10
Foreign trade will be depressed given recessionary conditions in most countries. Trade, hotels and transport service sectors are estimated to be downgraded by 2.0 per cent in FY21 from earlier estimates of 2.2 per cent.
GDP estimates revised, expected to contract by 1.5% in current fiscal
9/10
Financial services would grow at a positive rate though demand side issues would hold back growth. The credit flow to NBFCs has received a boost in the package and the details are awaited which would give an indication of the actual flow of funds to this sector.
GDP estimates revised, expected to contract by 1.5% in current fiscal
10/10
Gross Value Added by economy is estimated to lower down by 1.3 per cent in FY21. The downfall in various sectors which contribute to overall GDP is the cause of downfall in GVA in current fiscal.

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