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India’s annual median GDP growth in FY21 to contract 4.5%: FICCI survey

India's GDP growth in FY21In accordance with the latest round of Economic Outlook Survey of FICCI (Federation of Indian Chambers of Commerce and Industry), India’s annual median Gross Domestic Product (GDP) growth forecast for FY2020-21 has been declined to (-) 4.5% with a minimum and maximum growth estimate of (-) 6.4% and 1.5% respectively, as compared to January 2020 estimate of 5.5%. The current round of the survey was conducted in the month of June 2020.

  • The key reason behind this sharp decline is the lockdown to contain the rapid spread of COVID-19 which has severely impacted economies and healthcare globally. Now in Post lockdown, continuation of social distancing and quarantine measures is also affecting the growth prospects.
  • The official growth numbers for the first quarter (Q1FY21) are expected to be released by the end of August 2020.
  • As per the survey, there is a possibility of V-shaped recovery with government expenditure as in the current situation; it is the only helping hand for financial position of the economy. 

Key Points from survey- Growth prediction for Agriculture sector; Industry, service sector suffer

-The quarterly median forecasts indicate GDP growth to contract by (-) 14.2% in the first quarter of 2020-21, with a minimum estimate of (-) 25% and a maximum estimate of (-) 7.4%.

-Economic activity-wise annual forecast indicated a median growth of 2.7% for agriculture and allied activities for 2020-21.

-Industry and services sector, on the other hand, are expected to contract by 11.4% and 2.8%, respectively in 2020-21.

-The median growth forecast for IIP (India Industrial Production) has been put at (-) 11.5% for the year 2020-21 with a minimum and maximum range of (-) 15.3% and 1% respectively.

Wholesale Price Index (WPI) based inflation rate is projected at -0.3% in 2020-21, with a minimum and maximum range of (-) 1.5% and 2.5% respectively.

-On the other hand, Consumer Price Index (CPI) based inflation has a median forecast of 4.4% for 2020-21, with a minimum and maximum range of 3.3% and 6% respectively.

-The median current account balance forecast has been pegged at (-) 0.3% of GDP for 2020-21.

About FICCI (Federation of Indian Chambers of Commerce and Industry):
Secretary General– Dilip Chenoy
President– Sangita Reddy
Headquarter– New Delhi