Finance Minister Nirmala Sitharaman
The Centre will announce gross domestic product (GDP) numbers for the second quarter (July-September) of FY2020-21 on November 27.
The numbers are highly anticipated after dismal Q1FY21 performance which saw GDP contract by nearly 24 percent due to economic slowdown and the COVID-19 pandemic.
So, what are the expectations?
The RBI expects contraction of 8.6 percent and a report from the central bank said that India, for the first time may be in a “technical recession” due to two successive quarters of contraction.
Most experts CNBC-TV18 found in a poll felt that India's economy is likely to contract by 8.9 percent for the period and concurred with the RBI’s assessment of technical recession.
Besides this, State Bank of India (SBI) has revised their Q2 projection to 10.7 percent fall from their previous 12.5 percent, as per SBI Ecowrap; Care Ratings projects 9.9 percent contraction and ICRA estimates it to be 9.5 percent.
CRISIL has among the harshest projections of 12 percent contraction in Q2FY21, as it noted that recovery in high-frequency indicators are still below pre-pandemic levels despite some relief from April.
Further Bank of America expects a 7.8 percent contraction, while the National Council of Applied Economic Research projects 12.7 percent decline (10.3 percent fall in real GDP).
All these numbers are much better than the 23.9 percent slump recorded for Q1FY21 by the Union Ministry of Statistics and Programme Implementation (MoSPI).
Economic indicators also point to a recovery, as vehicle sales, real estate PMI and railway freight earnings continue to pick-up – outstripping even 2019 numbers. Income Tax (I-T) collections in September 2020, for the first time this fiscal exceeded 2019 numbers, while GST collections also crossed Rs 1.05 lakh crore in October and manufacturing PMI rose to 58.9 in October – a decade-long high, due to “robust sales,” according to IHS Markit.
Notably in Q1, only the agriculture sector showed growth (3.4 percent), while other segments were squeezed – Construction (50.3 percent), manufacturing (39.3 percent), mining (23.3 percent) and communication and services, trade and transport (47 percent each).