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GDP likely to contract by 7.7% in 2020-21, says Govt.

Indiaโ€™s real GDP (Gross Domestic Product)is estimated to contract by 7.7% in 2020-21, compared to a growth rate of 4.2% in 2019-20, with Real GVA (Gross Valued added) shrinking by 7.2%, as per advance estimates released by the National Statistical Office (NSO) on Thursday.

Indiaโ€™s economy had grown at 4.2% in 2019-20, but entered a recessionary phase with two successive quarters of sharp contraction triggered by the COVID-19 national lockdowns beginning March 2020.

Following a 23.9% collapse in the economy between April to June 2020 period, the GDP fell by 7.5% in the second quarter โ€“ leading to a real GDP contraction of 15.7% in the first half of 2020-21. The second half of the year will surface to record near-zero growth or a mere 0.1% contraction, the advanced estimates suggest.

Based on an uptick in several indicators in the last few months, several agencies have upgraded their estimates of Indiaโ€™s economy, with the Reserve Bank of India recently projecting a 7.5% contraction in the year compared to its earlier estimate of a 9.5% decline.

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