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May 31, 2021 / 11:00 PM IST

India GDP Data Highlights | Double-digit growth for FY22 uncertain, overall impact of 2nd wave may not be large: CEA

India GDP Data Highlights: The official data released by the government shows that the country's gross domestic product (GDP) has contracted by 7.3 percent in the financial year 2020-21. In the fourth quarter of FY21, however, a GDP growth of 1.6 percent was recorded. Meanwhile,CEA Krishnamurthy Subramanian said the economic impact of the second COVID-19 wave is not likely to be very large.

India GDP Data Highlights The National Statistics Office (NSO) has released the provisional full-year Gross Domestic Product (GDP) data for fiscal year 2020-21. The data released by the government shows that the GDP has contracted, for the first time since 1980-81. A contraction of 7.3 percent was reported in financial year 2020-21, the NSO data showed. In the fourth quarter

of FY21, the GDP has grown by 1.6 percent. Rating agency ICRA had estimated that India's GDP to grow by 2 percent in Q4FY21, and shrink by 7.3 percent in the full fiscal year.

Meanwhile, Chief Economic Adviser (CEA) K.V. Subramanian has said that the overall impact of the second wave of Covid-19 is unlikely to be significant, although there is uncertainty over possible double-digit growth in the current financial year.

Addressing the media after the release of the GDP numbers, the CEA also said that giving any actual numbers for economic forecast would not be prudent as the pandemic is evolving and the economic trajectory of the country totally depends on the severity of the pandemic.

"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." "Economic activity is inexplicably linked to the path of the pandemic," Subramanian said. He noted that "the speed and the scale of the second wave does lend caution" towards the economic recovery.

The CEA was of the view that with the country still battling with the pandemic continued monetary and fiscal policy support will be import going ahead. India's GDP growth rate plunged (-) 7.3 per cent in 2020-21. Though not comparable, the GDP had grown by 4 per cent in 2019-20.

However, Maharashtra's Congress leader Prithviraj Chavan, while commenting on GDP figures, said, "Foolhardy economic policies during pandemic have pushed back millions of Indians into poverty trap."
  • May 31, 2021 / 10:57 PM IST

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  • May 31, 2021 / 10:21 PM IST

    India GDP Data LIVE Updates | Double-digit growth for FY22 uncertain, overall impact of 2nd wave may not be large: CEA

    As India reported a 7.3 per cent contraction in its GDP for FY21, Chief Economic Adviser (CEA) K.V. Subramanian has said that the overall impact of the second wave of Covid-19 is unlikely to be significant, although there is uncertainty over possible double-digit growth in the current financial year.

    Addressing the media after the release of the GDP numbers, the CEA also said that giving any actual numbers for economic forecast would not be prudent as the pandemic is evolving and the economic trajectory of the country totally depends on the severity of the pandemic.

    "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."

    "Economic activity is inexplicably linked to the path of the pandemic," Subramanian said.

    He noted that "the speed and the scale of the second wave does lend caution" towards the economic recovery.

    The CEA was of the view that with the country still battling with the pandemic continued monetary and fiscal policy support will be import going ahead.

    India's GDP growth rate plunged (-) 7.3 per cent in 2020-21. Though not comparable, the GDP had grown by 4 per cent in 2019-20.

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  • May 31, 2021 / 08:47 PM IST

    Foolhardy economic policies during pandemic pushed back millions into poverty trap: Prithviraj Chavan ##India GDP Data LIVE Updates | "Foolhardy economic policies during pandemic have pushed back millions of Indians into poverty trap," says Maharashtra's Prithviraj Chavan on the GDP figures. 

  • May 31, 2021 / 08:36 PM IST

    India GDP Data LIVE Updates | Mr. Pankaj Bhansali, COO, Eqaro Surety Pvt Ltd: "The growth rate for the Jan-March quarter stood at 1.6%, it is a lot better than most expectations. The support mainly came from agriculture and manufacturing, construction, utilities segment. As expected trade, hotel and transport component of the economy delivered a major hit to the growth rate as it faced the most stringent lockdown. The full year FY21 GDP is a positive surprise as it contracted by 7.3% vs the CSO's estimate of -8%.

    Statistically it is the first yearly economic contraction in nearly 40 years but on ground situation has improved a lot and the data could have been lot worse had it not been the progressive unlocking undertaken by the respective state governments.

    The better than expected data will provide relief to the central bank as it announces its credit policy later this week. Moving forward the situation is expected to improve with few states relaxing curbs. A prediction of a normal monsoon year by IMD will keep inflation in check. The upcoming festive season will provide a pickup in demand. The consistent high number of vaccination and number of cases coming down is a sentiment booster. Broadly the economic growth rate will see an uptick from Q2FY22 onwards."

  • May 31, 2021 / 08:35 PM IST

    India GDP Data LIVE Updates | Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services Ltd: "4QFY21 real GVA grew 3.7% YoY, similar to our forecast of 3.9% but much higher than the market consensus of 2.6%. Because of massive subsidy payments, real GDP growth was 1.6% YoY, better than our/market forecast of 0.6%/1%. It implies a fall of 6.2%/7.3% in real GVA/GDP in FY21.

    Within GVA, while agri, M&Q & PADS grew slower than our expectations, slower fall in trade, hotels, transport & communication offset the former. Industrial growth was broadly in line with expectations.

    Within GDP, there was broad-based better than expected growth. Real consumption (led by government) grew 6.4% YoY, and real investments grew 13.8% last quarter. What more, nominal GDP grew 8.7% YoY in 4QFY21, same as that in 4QFY20.

    As far as Apr'21 is concerned, core infrastructure index has declined 15% MoM, fiscal spending has declined and auto sales have also fallen sharply. Overall, as broadly expected, things are about to worsen in 1QFY22 though YoY data will look very great.

    Lastly, excluding government consumption spending, real GDP actually moved into contraction territory (-1.1%) again in 4QFY21."

  • May 31, 2021 / 08:34 PM IST

    India GDP Data LIVE Updates | Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India: "Before we got hit by the second wave of COVID 19, Indian Economy had been moving back to normalcy supported by strong pent-up demand and that’s getting reflected in the improvement in Q4 FY21 GVA data. There has been a healthy rebound in manufacturing and construction sector, though the YOY growth has also been supported by the low base of last year. The sharp discrepancy in the GDP and GVA growth number is mainly due to large one-time subsidy adjustment and is on expected lines.

    The second wave of Covid 19 has had less adverse impact on the economy as the lockdown has been less stringent, localized and many businesses have adapted to the pandemic/lockdown. Having said that the secod wave of the pandemic has been more fatal and scarring for the households, and this will be reflected in their spending pattern. Moreover, the unorganized sector and MSME’s that are large contributors to the Indian economy, will find it extremely difficult to sustain two waves of the pandemic and the demand destruction in the last one and half years. India’s growth trajectory in the next few quarters will be strongly linked to the pace of vaccination and the time taken to control the pandemic. this would have direct bearing on business and consumer sentiments, which in turn will influence the consumption and investment scenario."

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  • May 31, 2021 / 07:57 PM IST

    India GDP Data LIVE Updates | Ram Raheja, Director, S Raheja Realty: "The slight pickup in the GDP amidst COVID and lockdown is likely to boost sentiments. The forecast of the future GDP states it may elevate better than the previous quarters. The growth rate swinging back in the positive territory is in line with most estimates, supported by high government spending, reform measures, and progressive unlocking. The improvement in the last two quarters does show some bright picture with the government's focus on improving infrastructure, the construction segment has shown phenomenal improvement. Going forward the steps taken to accelerate the vaccination drive will have major impact on the easing of lockdown and in turn the economy. Real estate will remain an investment of choice given that some uncertainty still persists."

  • May 31, 2021 / 07:54 PM IST

    India GDP Data LIVE Updates | Pankaj Bhansali, COO, Eqaro Surety Pvt Ltd: "The growth rate for the Jan-March quarter stood at 1.6%, it is a lot better than most expectations. The support mainly came from agriculture and manufacturing, construction, utilities segment. As expected trade, hotel and transport component of the economy delivered a major hit to the growth rate as it faced the most stringent lockdown. The full year FY21 GDP is a positive surprise as it contracted by 7.3% vs the CSO's estimate
    of -8%.

    Statistically it is the first yearly economic contraction in nearly 40 years but on ground situation has improved a lot and the data could have been lot worse had it not been the progressive unlocking undertaken by the respective state governments.

    The better than expected data will provide relief to the central bank as it announces its credit policy later this week. Moving forward the situation is expected to improve with few states relaxing curbs. A prediction of a normal monsoon year by IMD will keep inflation in check. The upcoming festive season will provide a pickup in demand. The consistent high number of vaccination and number of cases coming down is a sentiment booster. Broadly the economic growth rate will see an uptick from Q2FY22 onwards."

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