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India’s GDP to Contract by 11.8% in FY21; Rebound to 9.9% in FY22: Ind-Ra 

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India-Ratings-revises-FY21-GDP-growth-projection-to-negative-11India Ratings and Research(Ind-Ra), domestic rating agency projects India’s GDP (Gross Domestic Product) growth to contract by 11.8%(-11.8%), from earlier -5.3%. The rating agency also expects India’s GDP to rebound and grow at 9.9% year-on-year in FY22 primarily due to the weak base of FY21.

The Indian economy contracted by a record 23.9% in 1st (April-June) quarter of FY21, which is much higher than Ind-Ra’s forecast of 17.0% due to the impact of the COVID-19 pandemic(lockdown). 

Key Info

i.11.8% is the lowest GDP growth in the Indian history (GDP data is available from FY-1951).

ii.This is also the 6th instance of economic contraction, among others FY-1958, FY-1966, FY-1967, FY-1973 and FY-1980. The previous lowest was -5.2% in 1980.

Other Projections of Ind-Ra:

Economic Loss

India’s economic loss in FY21 is estimated to be Rs 18.44 lakh crore. 

Fiscal Deficit

The fiscal deficit for full fiscal(FY21) is estimated at 8.2%. Central government fiscal deficit to increase to Rs .15.17 trillion in FY21, from earlier Rs 7.96 trillion.


In FY21, Industry to contract by 24.2% and services to contract by 9.9%,  Agriculture to grow at 3.5% year-on-year,  Retail to be at 5.1% and wholesale inflation at -1.7%. 

Current Account

The current account is expected to record a surplus of USD8.4 billion (0.3% of GDP). All these will have a positive impact on the rupee.

Additional Info

i.It estimates economic loss in FY21 to be Rs 18.44 lakh crore. In the April-June quarter of FY21, GDP grew at (-) 23.9 per cent. It is the first contraction in quarterly GDP data series which have been made available in the public domain since the first quarter of FY-1998.

ii.There will be a shrink in contraction on a quarter-to-quarter basis and all four quarters are expected to be in red.

Recent Related News:

i.CARE Ratings Limited (formerly Credit Analysis and Research Limited) in its report, ‘Revised GDP growth projections for FY21’ has projected a 6.4 % contraction (or -6.4%) in India’s GDP (Gross Domestic Product) growth for the current financial year FY 21 (2020-21). Earlier in May 2020, the agency had predicted a 1.5 to 1.6 % decline in GDP for 2020-21.

ii.ICRA Limited (formerly Investment Information and Credit Rating Agency) projects India’s Gross Domestic Product(GDP) to contract by 9.5%(-9.5%) in FY21 from 5% earlier forecasted as ongoing lockdowns in some states have affected the recovery seen in May and June 2020.

About India Ratings and Research (Ind-Ra):
Ind-Ra is a 100% owned subsidiary of the Fitch Group.
Chief Executive Officer (CEO) & Managing Director (MD)– Rohit Karan Sawhney
HeadQuarters– Mumbai, Maharashtra