Ali Hasan
2020 is over but 2021 isn’t as good as we hoped. The government just said that India’s GDP may contract by 7.7% in 2020-2021. It’s the biggest contraction since 1952. Investments are also projected to decline by 14.5% while private consumer spending would fall by 9.5%, the official data noted. Countering this, government spending would grow, but at 5.8% in 2020-21.
This is the worst performing year for India’s economy since India began publishing its gross domestic product (GDP) data. 1951-1952 was the fiscal year when India first began to publish its annual GDP data. This fiscal year, ending March 2021, the economy has entered a recessionary phase after seeing two successive quarters of sharp contraction.
This contraction, as estimated by NSO, would be the first ever witnessed in India in over four decades. The last time this occurred was in the fiscal year 1979-1980 when India’s GDP contracted by 5.2%.
But the NSO’s estimates aren’t the only gloomy one out there. The latest estimates released by the World Bank paint an even bleaker picture. As per World Bank’s Global Economic Prospects report, India’s economy will contract by a whopping 9.6% in FY21, and is expected to recover upto 5.4% in 2022 as it will rebound from a low base.
The reason for this massive downfall in the GDP of the country is due to the pandemic. Even before the pandemic, India’s GDP was just 3.1% for Jan-Mar 2020 and it declined a massive -23.9% after the lockdown as most of the economic activities were completely shut down. Let’s see what happens in the future and how well India recovers from this recession.
I don’t know about you guys but my hopes aren’t very high. All of the above figures are released by the National Statistical Office (NSO).
