Key Points:
i.It has also reduced the growth forecast in first quarter (Q1) of FY2021 to 25 % as compared to the previous forecast of 16-20 % and to minus 2.1 % in Q2 as against the 2.1 % growth predicted earlier. It implied the economy was in recession.
ii.However, the agency predicted better growth of 2.1 % growth in Q3 (against previous estimate of 3.6 %) and 5 % in Q4 of current FY 2021. It expected a V-shaped recovery for the economy based on the assumption that the lockdown would be cleared within the first quarter. However, the recovery will like W-shape in the event of a second wave of coronavirus (COVID-19) pandemic.
iii.Earlier, the Finance minister (FM) Nirmala Sitharaman announced an fiscal stimulus package under the ‘Atma Nirbhar Bharat Abhiyan’ or ‘Self-Reliant India Movement’ at a modest 10 % of the GDP with a total outlay of Rs 20 lakh crore. However, analysts have pegged it at just 0.8-1.2 % of GDP.
About ICRA Limited:
Headquarters– Gurugram, Haryana
Non-Executive Chairman and independent director– Arun Duggal
Chief economist– Madan Sabnavis