India’s GDP shrunk by 7.3pc in FY21 (April 2020-March 2021) compared to previous fiscal year — its worst plunge in a decade. In March quarter, however, GDP grew by a marginal 1.6pc over the same period last year, according to data released by the government on Monday.
GDP contraction was caused by the pandemic which stalled the economic growth of several economies, including India. Q4 (Jan-Mar) numbers show a slight improvement despite the situation being near-normal in these three months period, indicating the poor fiscal health of the country.
In the prior fiscal year, GDP growth was around 4pc followed by a drop in manufacturing and construction.
In FY21, the first quarter witnessed a drastic fall of GDP to 24.38pc, majorly because of the lockdown and hurt several sectors hurt. GDP growth revived in April-June quarter (Q2) to a contraction of 7.5pc and was in the positive territory in the October-December period (Q3) with a marginal 0.4pc growth.
OECD slashes FY22 outlook
The Organisation for Economic Co-operation and Development (OECD) slashed India’s growth projection for FY22 from 12.6pc to 9.9pc on the back of the the second COVID-19 wave in the country.
The 38-member intergovernmental organization said in its outlook for FY22 that if the pandemic is contained, India’s GDP could see a growth of around 10pc in the current fiscal and 8pc in FY23.
OECD noted that pent-up consumer demand, easy financial conditions and strong external market growth will help country’s economic recovery.