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