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India’s GDP contracts 7.3% in 2020-21

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India’s GDP recorded negative growth of 7.3% for 2020-21 while the growth during the fourth quarter (January-March) of the fiscal showed a rise of just 1.6%. The NSO on Monday released the GDP numbers with the growth being poor for the fourth quarter despite sectors being opened and unlocked being lifted. The Central Statistics Office (CSO) released the GDP numbers for the January-March quarter and financial year 2020-21 on Monday evening.

“Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2020-21 is now estimated to attain a level of Rs135.13 lakh crore, as against the First Revised Estimate of GDP for the year 2019-20 of Rs145.69 lakh crore, released on 29th January 2021,” the Ministry of Statistics & Programme Implementation said in a release.

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It said the growth in GDP during 2020-21 is estimated at -7.3% as compared to 4.0% in 2019-20. The 4% GDP growth in 2019-20 was the lowest in 11 years and was triggered by contraction in secondary sectors like manufacturing and construction.

India’s GDP in earlier quarters

The GDP growth for the third quarter of 2020-21 (October-December), was 0.4%. Amid a nationwide lockdown in 2020, the first quarter (April-June) had seen a contraction of 24.4% while the second quarter (July-September) saw a contraction of 8%. This resulted in India falling into a technical recession when the GDP contracted for two straight quarters. It was the first technical recession India experienced since it began releasing quarterly estimates of GDP in 1998.

Chief Economic Adviser (CEA) KV Subramanian told a news agency that the growth was affected by the second wave of the pandemic. “The GDP growth momentum was affected by the second wave. Indian economy grew 1.6% in the fourth quarter of the financial year 2020-21. Full-year GDP contraction was 7.3%,” he said.

He added that foodgrains production is expected to be at record levels this year and coming year given the normal monsoon predicted by the IMD. He said demand in rural India has been resilient.

 

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