India's GDP contracts -7.3 percent in year 2020-21

New Delhi: India's Gross Domestic Product (GDP) contracted by 7.3 per cent in the year 2020-21 against 4 per cent growth estimated in 2019-20, Ministry of Statistics and Programme Implementation (MoSPI) said on Monday.

Quarter-wise, the GDP in the first quarter of 2020-21 (April-June) declined by -24.4 per cent, the worst since Independence due to nationwide COVID-19-induced lockdown.

In Q2 (July-September), a downfall of -7.4 per cent was registered as the lockdown was partially lifted, while in Q3 (October-December), the GDP grew by 0.4 per cent as most of the activities were resumed.

In the last quarter of 2020-21 (January-December), the GDP witnessed a growth of 1.6 per cent.

"The growth in GDP during 2020-21 is estimated at -7.3 percent as compared to 4.0 percent in 2019-20,"

an official release said. The GDP is estimated at Rs 197.46 lakh crore, as against the revised estimates of Rs 203.51 lakh crore in 2019-20, it said.

The measures taken by the Government to contain the spread of the COVID-19 pandemic had an impact on economic activities, the release said."Agriculture" and "electricity, gas, water supply and other utility services" were the only sectors which registered a growth of 3.6 per cent and 1.9 per cent.

Maximum downfall was witnessed in the "trade, hotel, transport, communication and services related to broadcasting" showing a decline of -18.2 pc.Mining and quarrying slumped by -8.5 pc, construction by -8.6 pc, finance, real estate and professional services by -1.5 pc and public administration, defence and other services by -4.6 per cent.

In 2019-20, maximum growth of 8.3 per cent was witnessed in "public administration, defence and other services" while minimum -2.5 per cent in Mining and quarrying.

Chief Economic Adviser K V Subramanian, commented, "The momentum of GDP growth has been affected by the second wave but the overall economic impact of the second COVID-19 wave not likely to be very large."

"Foodgrains production is expected to be at record levels in this year and coming year given the normal monsoon that has been predicted by the IMD. This is reflected both in cereals (rice and wheat) and pulses. The demand in rural India has been resilient," he added.

However, the CEA adviced the need to enhance the pace of vaccination to lower the likelihood of another COVID-19 wave(UNI)