E-Paper
Economic Survey: GDP growth seen at 11% for 2021-22, 'V-shaped recovery' likely
India's gross domestic product (GDP) contracted by a record 23.9% in April-June and by 7.5% in the second quarter.
The government forecast a strong economic recovery of 11% for the fiscal year beginning April 1, 2021, in its annual Economic Survey presented by Union finance minister Nirmala Sitharaman in Parliament on Friday. The Economic Survey 2020-21 gives details on the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.
The survey, which comes just ahead of the Union budget for the new fiscal year to be presented by Sitharaman on Monday, also forecast a "V-shaped" economic recovery.
Here's what the Economic Survey said:
1. India's gross domestic product (GDP) contracted by a record 23.9% in April-June and by 7.5% in the second quarter.
2. The survey projected a contraction of 7.7% in the economy for the current fiscal year and said that there would be a "V-shaped" recovery in the next. The contraction of 7.7% in the current financial year ending March 31 came after economic activity was hit by the coronavirus pandemic, leading to job losses for millions of workers.
3. Even though the survey forecast a "V-shaped" economic recovery, it also cautioned that it would take at least two years to go back to the pre-pandemic gross domestic levels.
4. "With the economy's returning to normalcy brought closer by the initiation of a mega vaccination drive, hopes of a robust recovery in the services sector, consumption, and investment have been rekindled," said the survey.
5. The projection for next year is in line with the International Monetary Fund’s estimate for 11.5% expansion, which will once again make India the fastest-growing major economy in the world ahead of China’s 8.1% pace.
6. The government may miss its fiscal deficit target of 3.5% of GDP this fiscal, the Economic Survey said.
7. "In order to sustain the recovery in aggregate demand, the government may have to continue with an expansionary fiscal stance," the Economic Survey said.
8. The survey said there’s a need for more sustained and calibrated measures to facilitate the process of economic recovery in the new fiscal year.
9. According to the survey, headline inflation will moderate going forward in a development that could open up room for the Reserve Bank of India (RBI) to resume monetary policy easing to complement fiscal measures to support the economy.
10. The International Monetary Fund (IMF) has projected the contraction in the Indian economy at 8% in 2020-21. The global body expects growth of 11.5% in 2021-22 before a decline to 6.8% in 2022-23.
(With agency inputs)
