On April 24, 2020, the CARE Ratings has projected the gross domestic product (GDP) of India for Fiscal Year (FY) 2020-2021 between 1.1%-1.2% amid nationwide lockdown resulting in disruptions and halting of activities. The lockdown was announced on March 24 for 21 days, which has now been extended until May 3, 2020.
- Gross Value Added (GVA) has been estimated to grow at 1.4% for FY21.
- Overall growth is expected to be driven only by the government expenditure.
Revision in FY20 GDP; Declined to 4.7%
The agency also revised the GDP forecast for FY20 by declining it to 4.7% from 5% with GVA growth expected at 4.6%.
-CARE has assessed 8 sectors for GDP projection of FY21 out of which 3 sectors are anticipating a decline viz. mining and quarrying, manufacturing and construction.
-During the year, tax collections will be low as the target of Rs. 1 lakh crore of GST per month may not be achieved due to restrictions imposed by states on non-essential commodities amid COVID-19.
-This estimate is based on the assumption that post June 2020, the activities would restore very gradually and may not be able to even attain 50% of normalcy for certain sectors for FY21.
Table showing sector-wise growth and de-growth in 8 sectors
|Sector with expectations of growth|
|Agriculture||2.5%||Prediction of normal monsoon this year|
|Electricity, gas and water supply and other utility services||2%||the retail consumption continued and demand is likely to pick up post the resumption of industrial activities|
|services, trade, hotels, transport, communication and services||2.2%||Partial recovery expected in second half of year|
|Financial, real estate and professional services||0.5%||Overall Muted growth due to negative growth in real estate|
|Public administration||10%||Govt expenditure will be the only driving factor during the year|
|Sectors with expectations of de-growth|
|Mining and quarrying sector||2%||Output of the sector halted due to lack of labour and social distancing norms.|
|Manufacturing sector||3%||Witnessed halt in production|
|Construction||4%||Getting labour back on board and completing ongoing projects is challenging|
About CARE Rating:
Headquarters– Mumbai, Maharashtra
Managing Director (MD) & Chief Executive Officer (CEO)– Ajay Mahajan