India’s GDP in FY2021 could contract by 7.7-7.9pc, according to Care Ratings. In the second quarter (July-Sep), GDP contracted by 7.5pc, a rate lower than earlier estimated 9.9pc. Still, the resurgence of COVID-19 pandemic and renewed restrictions in the parts of the country will keep the economy under pressure, believes the ratings agency.
In Q2, India’s GDP registered a steep decline from 4.4pc growth in Q2 FY2020 but improved from a negative 24pc in Q1. A growth on a quarterly and yearly basis in the agriculture, manufacturing and electricity sectors cushioned the fall.
Despite economic stimulus packages announced, the government consumption in the quarter contracted by 22.2pc against a growth of 16.4pc in the preceding quarter. While private consumption contracted by 11.32pc compared to a growth of 6.4pc in the prior-year quarter.
India’s GDP contraction, however, was lower than 8.7pc in Spain and 9.6pc in the UK. Asian economies like China, Vietnam and Taiwan have recorded a growth, states the Care ratings report.
Sector wise change in GDP
| Q2 FY 2020 | Q2 FY 2021 | |
| Manufacturing | -0.6 | 0.6 |
| Mining | -1.1 | -9.1 |
| Construction | 2.6 | -8.6 |