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India’s FY21 GDP to Contract by 7% from -7.4%: SBI’s Ecowrap Report

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Indian economy to contract by 7 pcOn February 10, 2021 Ecowrap report of the State Bank of India (SBI) has estimated that India’s Gross domestic Product(GDP) for FY 21 will contract by 7%(-7%) from -7.4%  projected earlier. The GDP growth in FY22 will remain at 11%.

Nowcasting Model

The bank has revised the GDP estimates on the basis of SBI ‘Nowcasting Model’ with 41 high frequency indicators associated with industry activity, service activity, and global economy. This model is developed by SBI and State Bank Institute of Leadership(SBIL), Kolkata.

Highlights of the Report:

i.The GDP growth for Q3 will be around 0.3% (with upward bias) and for Q4 it will be approximately 2.5%.

ii.The gross tax collections in 2021-22  will be higher than the Budgeted Rs 22.17 lakh crore, or 9.9% of GDP

Other GDP Prediction

i.FY 21

National Statistics Office (NSO): Real GDP is estimated at -7.7%  
Reserve Bank of India(RBI):  -7.5%
Economic Survey: -7.7%

Union Budget: In Budget 2020-21,the Nominal growth of GDP for FY 21 was estimated at 10% but during the Budget 2021-22, the GDP for FY 21 was revised to -13%.

ii.FY 22
RBI: 10.5%
Economic Survey:11.5%

Union Budget: In Union Budget 2021-22, The nominal GDP is estimated to grow at a rate of 14.4%.

Recent Related News:

According to the Global Economic Prospects (GEP-January 2021) report released by the World Bank (WB), India is expected to grow at 5.4% in the Financial Year (FY) 2021-22 & 5.2% in FY 2022-23 after an expected contraction of 9.6% in FY 2020/21. The report also highlighted that the Global Economy is expected to expand by 4% in 2021.

About SBI (State Bank of India):

Founded– July 1, 1955 as SBI
Headquarters– Mumbai, Maharashtra
Chairman– Dinesh Kumar Khara
Tagline– The banker to every Indian; With you all the way; Pure banking nothing else; The nation banks on us; A bank of the common man