A report by the Ministry of Finance said on Wednesday that the actual GDP growth in 2020-21 would depend on the intensity, spread and duration of the coronavirus pandemic. The report stated that the ministry was cautiously optimistic about India's economic prospects.
The report prepared by the Economic Affairs Division of the Finance Minister said that it took comfort from IMF's projection of 1.9 per cent growth in the current fiscal. Last month, the IMF had projected India's GDP to fall to 1.9 per cent in FY21 as against 5.8 per cent estimated in January.
The ministry's report added that the government is aware of the impact of the corona pandemic. "Government is cognizant of the relative severity of lockdown on economic activity in the country and is cautiously optimistic about the signals from Indian benchmark equity indices," stated the report.
The Finance Ministry report said that these are still early days and COVID-19 pandemic is yet to abate. "The country's actual GDP growth in FY 2020-21 will be contingent upon the intensity, spread and duration of the COVID-19 pandemic within national territory," it said.
A high possibility of global slowdown and disruption of the supply chain due to prolonged lockdowns are only some of the factors posing downside risks to India's growth. The report stated that the country continues to tackle the health crisis and the focus has now been shifted to the economy that has been debilitated by the lockdown. The government and the RBI are working towards implementing substantial targeted fiscal and monetary measures to support affected sectors of the economy, it said.
This report comes after the government unveiled the Rs 20 lakh crore economic stimulus package. The minister unveiled the stimulus in tranches and announced measures that could not only benefit the salaried class but also MSMEs, farmers, urban poor, and a host of sectors. The total stimulus of Rs 20,97,053 crore included the earlier measures announced by the Reserve Bank of India (RBI) worth Rs 8,01,603 lakh crore and Rs 1,92,800 crore announced by the government under Pradhan Mantri Garib Kalyan Package (PMGKP).