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NSO’s Advance Estimates of GDP for 2020-21:India’s GDP to Contract by 7.7% in 2020-21

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Advance Estimates of GDP of 2020-21On January 7, 2021, the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) released the First Advance Estimates of National Income at both Constant (2011-12) and Current Prices, for FY 2020-21.The growth in real GDP during 2020-21 is estimated at -7.7% as compared to the growth rate of 4.2% in 2019-20.

  • It should be noted that there is a sharp revision of estimates due to restrictions imposed from 25 March, 2020 amid COVId-19. Though these were gradually lifted there but have impacted the economic activities as well as the data collection mechanisms.

Method used for Advance Estimates:

Benchmark-Indicator

Key Indicators used:

  • Index of Industrial Production (IIP) of first 7 months of the financial year
  • Financial performance of Listed Companies in the Private Corporate sector upto Q2FY21 (September, 2020)
  • 1st Advance Estimates of Crop production
  • Accounts of Central & State Governments
  • Deposits & Credits
  • Projections for Freight earnings of Railways, Passengers and Cargo handled by Civil Aviation, Cargo etc., available for first 8 months of the financial year

Key Estimates:

–Real Gross Domestic Product (GDP) or GDP at Constant Prices (2011-12) in the year 2020-21 is projected at Rs 134.40 lakh crore, as against the Provisional Estimate of GDP for the year 2019-20 of Rs 145.66 lakh crore, released on 31st May 2020.

–Real Gross Value Added (GVA) at Basic Prices is estimated at Rs 123.39 lakh crore in 2020-21, as against Rs 133.01 lakh crore in 2019-20, showing a contraction of 7.2%.

–As per quarterly estimates of NSO, real GDP contracted by 15.7 percent in first half of 2020-21. Real GDP on a quarter-on-quarter basis grew at 21 percent from Q1: FY 2020-21 to Q2: FY 2020-21. TheAE of 2020-21reflect continued resurgence in economic activity in Q3 and Q4 – which would enable the Indian economy to end the year with a contraction of 7.7 percent.

–Nominal GDP or GDP at Current Prices in the year 2020-21 is projected to be at Rs 194.82 lakh crore, as against the Provisional Estimate of GDP for the year 2019-20 of Rs 203.40 lakh crore.

–The growth in nominal GDP during 2020-21 is estimated at -4.2%.

–Nominal GVA at Basic Prices is estimated at Rs175.77 lakh crore in 2020-21, as against Rs183.43 lakh crore in 2019-20.

The release of Second Advance Estimates of National Income for the year 2020-21 and quarterly GDP estimate for the quarter October-December, 2020 (Q3 of 2020-21) will be on 26.02.2021.

Additional Info for FY20-21:

–In FY20-21, the manufacturing sector is likely to see a contraction 9.4%.

–There is significant contraction in mining and quarrying, trade, hotels, transport, communication and services related to broadcasting.

Agriculture sector is estimated to see a growth of 3.4% in 2020-21 lower than the 4% growth recorded in 2019-20.

Electricity, Gas, Water Supply & Other Utility services sector is likely to grow at 2.7%.

Note- Only these above two sectors are estimated to record positive growth in GVA this 2020-21.

–Among services sectors, trade, hotel, transport are projected to contract 21.4% while financial services and public services are estimated to contract 0.8% and 3.7% respectively.

The table below shows real GDP/GVA growth rates on the demand and supply side in 2020-21

Demand Side GDP Real Growth(%) in2020-21 Supply Side GVA Real Growth(%) in2020-21
Private Consumption -9.5 Agriculture 3.4
Government Consumption 5.8 Mining -12.4
Fixed Investment -14.5 Utilities 2.7
Exports -8.3 Manufacturing -9.4
Imports -20.5 Construction -12.6
Services -8.8

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Recent Related News:

i.In accordance with the report on “Household Social Consumption: Education in India as part of 75th round of National Sample Survey(NSS) – from July 2017 to June 2018′′ conducted by National Statistical Office (NSO), MoSPI, Kerala again emerged as the most literate state in the country with 96.2% literacy followed by Delhi (88.7%), Uttarakhand ( 87.6%), Himachal Pradesh (86.6%) and Assam (85.9%).

ii.In accordance with the official data released by the National Statistics Office (NSO), India’s GDP for Q2FY21 contracted by 7.5% as compared to the expansion of 4.4% in the corresponding July-September period of 2019-20.

About Ministry of Statistics and Programme Implementation (MoSPI):
Minister of State (MoS), Independent Charge – Rao Inderjit Singh