Gross fixed capital formation (GFCF), which is an indicator of the level of investments in the country, fell by 10.8 percent during the financial year 2020-21 as compared to a rise of 5.4 percent during the previous fiscal.
GFCF is 31.2 percent of gross domestic product (GDP) in 2020-21, compared to 32.5 per cent in the previous year. However, on a quarterly basis, GFCF rose by 10.8 percent compared to the fourth quarter of the previous financial year.
GFCF was 34.3 percent of the GDP in the January-April quarter of 2020-21 compared to 33 per cent in the October-December quarter of 2020-21, and 31.5 per cent a year ago as per the data released by the National Statistical Office on May 31. The country's GDP rose by 1.6 percent in the fourth quarter, as compared to 0.5 percent in the third quarter and 3 percent in the fourth quarter of 2019-20.
On the other hand, Government Final Consumption Expenditure (GFCE) rose by 2.91 percent to Rs. 15.86 lakh crore in FY21, up from Rs 15.41 lakh crore in the year before.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
GFCF is an indicator for gauging the fixed capital formation. A downward trajectory in gross fixed capital formation would indicate that the fixed capacities are not being ramped up.
Though the country had recorded the largest number of COVID-19 infections, second only to the United States, the COVID wave had affected India severely hitting its economic and investment climate. However, the central government is of the opinion that the economic impact will be minimal compared to last year, as lockdowns are looser this time and growth in manufacturing and exports is higher.
Finance Minister Nirmala Sitharaman had said last week that no decision has been taken for another stimulus package. She hinted about having limited space due to a drop in tax collections and a rise in public debt. As an effort to boost investments during the pandemic, the government had extended Rs 111 lakh crore National Infrastructure Pipeline to cover 7,400 projects by 2025. The Centre had also announced that a sum of Rs 20,000 crore has been provisioned in the Budget to launch the National Asset Monetisation Pipeline.