India’s GDP likely to contract 4.5pc in FY21

7 July, 2020 12:00 AM printer

NEW DELHI: India’s gross domestic product (GDP) is expected to contract 4.5 per cent in fiscal 2020-21 in line with the global growth slowdown due to coronavirus lockdown. The projection was 6.4 percentage points lower than what the government had estimated in April this year, the Ministry of Finance said.

On coronavirus, the Department of Economic Affairs (DEA) said in its macroeconomic report that uncertainty around COVID-19 in absence of a vaccine poses a serious challenge. However, the government’s structural reforms and social welfare measures would help build greenshoots, it added, report agencies.

Adding, it said that exports have increased amid pandemic and the lockdown due to a sharp decline in imports and low crude oil prices in the global markets. DEA also said that revenue receipts so far in the ongoing fiscal have fallen 68.9 per cent on a year-on-year basis. The inflation outlook continues to remain weak. The trajectory of inflation will continue to depend on the recovery rate from the coronavirus.