GDP

Gopinath said the upgrade in India's GDP growth forecast is "because activity and mobility particularly came back much faster than expected in India. We have not seen another wave. In fact, we've seen a very strong decline in cases, which is again a bit different from other parts of the world".

The FICCI survey noted that the industrial recovery is gaining traction, but the growth is still not broad based. The consumption activity did spur during the festive season as a result of pent-up demand built during the lockdown but sustaining it is important going ahead.

It said that the pandemic has disproportionately affected labour-intensive service sectors in both developed and developing countries. Commercial air travel, tourism, catering, leisure, personal care and retail industries, manufacturing, trade and transportation, which typically employ large numbers of low-skilled workers, faced the largest job losses.

India’s vaccine drive was backed by a sophisticated system designed to be as efficient as possible. Furthermore, the comparative advantage of having the biggest vaccine production facility in the world and rich experience in mass vaccination operations against Polio and measles have surely favoured India in the fight against coronavirus.

The country is expected to be the only major economy to post growth in the pandemic-ravaged year, according to the National Bureau of Statistics (NBS). The latest World Economic Outlook report released by the Organization for Economic Cooperation and Development predicts that China will contribute more than one-third of global economic growth in 2021.

The report said economic activities are slowly reaching pre-Covid levels following the relaxation of the lockdown, except in sectors that remain affected by social distancing norms. However, Revival in sectors that fall under discretionary spending is likely to be delayed as the economy is still under the grasp of the pandemic.

"Real GDP or GDP at Constant Prices (2011-12) in the year 2020-21 is likely to attain a level of Rs 134.40 lakh crore, as against the provisional estimate of GDP for the year 2019-20 of Rs 145.66 lakh crore, released on May 31, 2020," the First Advance Estimates of National Income for financial year 2020-21 said.

The economy, which faced a severe slowdown prior to the pandemic, was decimated due to the lockdown imposed to curb the pandemic's spread. Accordingly, the country's GDP contracted by more than 23 per cent in Q1FY21. Nonetheless, slow tapering of mobility and lockdown restrictions along with pent up demand narrowed this contraction to under 10 per cent in Q2FY21.

It pointed out the easing of the Covid-19 headwinds and better-than-expected 2QFY21 GDP numbers as the reasons behind such a move. "However, the question remains, how sustainable is the recovery witnessed in 2QFY21, as a significant part of the impetus came from the festival and pent-up demand," the ratings agency said in a report.

The Reserve Bank of India (RBI) also has revised the real GDP growth projection for FY21 upwards to (-) 7.5 per cent on the back signs of faster recovery after the narrowing of the GDP contraction for the July-September, along with hopes of Covid-19 vaccines.