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India’s GDP to Contract by 8% in 2020-21: FICCI

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India's GDP to contract 8% in FY21As per The Federation of Indian Chambers of Commerce & Industry (FICCI)’s recent Economic Outlook Survey, India’s Gross Domestic Product (GDP) is expected to contract by 8 in (-8%) in 2020-21. This survey was conducted in January.

  • The survey projected the Fiscal deficit for 2020-21 at 5%.
  • It also expects the Indian economy will perform better and have a median GDP growth rate of 9.6% for the financial year 2021-22, with a minimum growth and maximum growth at 7.5%and 12.5% respectively.

Economic Outlook Survey

The annual median growth forecast is based on the responses from leading economists representing the industry, banking and financial services sector.

Highlights of the Survey:

Quarter

The GDP growth in the 3rd quarter of 2020-21 to contract by 1.3%, this projection is as per the indication of  quarterly median forecasts.

It is expected that there will be growth of 0.5% by the 4th quarter.

3 Main Sectors of Indian Economy

i.The median growth forecast for agriculture and allied activities is pegged at 3.5% growth for 2020-21.

ii.Industry and service sector will contract by 10% and 9.2% respectively during 2020-21.

  • It is to be noted that Agriculture is the only sector among three main sectors of Indian economy namely, Industry and services that has registered a growth in 2020-21.

India Industrial Production 

The median growth forecast for India Industrial Production (IIP) for 2020-21 is expected to be -10.7%, with a minimum range of -12.5% and maximum range of -9.5 %.

WPI & CPI Based Inflation Rate

The Wholesale Price Index (WPI) based inflation rate is expected to be flat in 2020-21.

The Consumer Price Index (CPI) based inflation has a median forecast of 6.5% for 2020-21, with a minimum and maximum range of 5.8% and 6.6% respectively

Recent Related News:

The ‘Asian Development Bank(ADB)’s ‘Asian Development Outlook (ADO) 2020 Supplement: Paths Diverge in Recovery from the Pandemic’- December 2020, has revised India’s Gross Domestic Product (GDP) FY21 rate upwards to -8%(contract by 8) from -9% projected in Asian Development Outlook 2020 Update in September 2020.

The Growth will return in 2021 at 8.0% in India.

About Federation of Indian Chambers of Commerce & Industry (FICCI):

Established– 1927
Headquarter– New Delhi, Delhi
President– Uday Shankar