India's GDP contraction, due to the impact of Covid pandemic, narrowed down to (-) 6.6 per cent in FY21 from an earlier projection of (-) 7.3 per cent on a year-on-year basis, the First Revised Estimates for 2020-21 showed on Monday.
"Real GDP or GDP at constant (2011-12) prices for the years 2020-21 and 2019-20 stands at Rs 135.58 lakh crore and Rs 145.16 lakh crore, respectively, showing a contraction of 6.6 per cent during 2020-21 as compared to growth of 3.7 per cent during 2019-20," the National Statistical Office (NSO) said.
As per the estimates, real GVA at constant (2011-12) basic prices contracted by 4.8 per cent in 2020-21, as against growth of 3.8 per cent in 2019-20.The earlier projection had pegged the GVA at (-) 6.2 per cent.
ICRA Chief Economist Aditi Nayar said: "The revised estimates have revealed a modest narrowing of the contraction in GDP and GVA in the pandemic-infested FY2021.
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"Nevertheless, all the components except agri and financial real estate and professional services on the production side and government consumption expenditure on the demand side continued to report a YoY de-growth in FY2021."
According to Nayar, the change in the GVA growth has been led by an improved performance of three key sectors with a hefty weight of 49 per cent in the economy, namely manufacturing, construction, and financial, real estate and professional services, which more than offset the downward revision in agriculture, mining and quarrying, electricity, trade etc and public administration, defense and other services.
India Ratings & Research Chief Economist, Devendra Kumar Pant, said: "With availability of updated data, GDP growth for FY20 is also revised downward to 3.7 per cent from 4 per cent earlier.
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"Major reason for slower growth in FY20 is consumption slowdown is sharper than estimated earlier. However, consumption slowdown in private consumption in FY21 is shallow now, at (-) 6 per cent compared to (-) 9.1 per cent earlier. Since proportion of consumption is GDP is closer to 57 per cent, FY21 growth contraction is lower than estimated earlier."
