The Union Finance Minister Nirmala Sitharaman tabled the Economic Survey for 2020-21 in Lok Sabha, on Friday. The real growth rate for the Financial year 2020-21 is taken as negative (-) 7.7 percent, according to the Ministry of Statistics and Programme Implementation. Meanwhile, the real growth rate for the next financial year (FY 2021-22) is assumed as 11.5 percent, which is based on the IMF outlook.
The economic survey predicts a V-shaped recovery in 2021-22.
“India was the only country to announce a slew of structural reforms to expand supply in the medium to long term and avoid long-term damage to productive capacities,” said the survey.
“The upturn in the economy while avoiding a second wave of infections makes India a sui generis case in strategic policymaking amidst a once-in-a-century pandemic,” it added.
The Economic survey attributed the contraction in the economy to the Coronavirus pandemic, which brought almost every sector to a grinding halt as the government imposed a countrywide lockdown in March 2020.
Meanwhile, the Reserve Bank of India had predicted that the country will also contract by 7.3 percent which is in line with the Economic Survey’s outlook for FY 2021-22. The latest positive news came from International Monetary Fund, which expects the country to grow 11.5 percent in its latest World Economic Outlook Update released on January 19. Due to the pandemic, IMF had also estimated a contraction of 8 percent for the Indian economy in FY 2020-21, which will end on March 31, 2021.
IMF also predicts a decline to 6.8 percent in 2022-23 and adds that India will regain the tag of the fastest-growing large economy in the world in both years.
In the quarter ended June 2020, the GDP contracted by 23.9 percent followed by a milder contraction of 7.5 percent in the quarter ended September 2020.
(with inputs from ANI)