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India’s GDP to Contract by 7.3% in FY21: NCAER

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NCAER expects GDP to contract 7On December 22, 2020 The ‘2020-21 Mid-Year Review of the Indian Economy’ of National Council of Applied Economic Research (NCAER) has forecasted that India’s Gross Domestic Product(GDP) in FY21 will contract by 7.3%(-7.3%) from -12.6% estimated in September 2020 with anticipation that the economy will register marginal growth in the December quarter.

Important Info

NCAER’s GDP forecast of -7.3% for FY21 is higher than the Reserve Bank of India(RBI)’s forecast of -7.5%


The long-term effect of sharp contraction of 2020 is likely to be long lasting.

Other Key Projections


The GDP for Q3(October-December 2020) of FY21 is expected to be 0.1% and 2% for Q4(January-March 2021) of FY21.

Annual CPI inflation & CPI headline inflation

It forecast the annual CPI(Consumer Price Index) inflation at 6.7% for FY21.

It forecast the CPI headline inflation at 7% in Q3 and 6.3% in Q4.

The headline inflation in December 2020 is 6.6% and 6.93% in November 2020.

Fiscal Deficit

The fiscal deficit of Centre and state together will amount to more than 14% of GDP for FY21.

Key Info

i.In order to reach the pre pandemic growth path, Indian economy has to grow more than the previous trend.

ii.This can be achieved with the support of Conventional macroeconomic policies, deep and wide ranging reforms, especially in the financial sector, power and  foreign trade

iii.Additional reforms in health, education, labour and land are also needed.

Recent Related News:

On November 12, 2020 As per Moody’s ‘Global Macro Outlook 2021-22: Nascent economic rebound takes hold globally but will remain fragile’, India’s GDP(Gross Domestic Product) for the Calendar Year(CY) 2020 is revised upwards to -8.9%(contract by 8.9) from -9.6% projected earlier. Goldman Sachs in its global economic analysis report titled ‘V(accine)-Shaped Recovery’, has projected India’s GDP growth to contract by 8.9%(-8.9%) for CY 2020.

About National Council of Applied Economic Research (NCAER):

Headquarters– New Delhi, India
President– Nandan M Nilekani
Director General– Shekhar Shah