• India
  • Jan 08
  • Mathew Gregory

Advance estimates of GDP of 2020-21

    • The National Statistical Office (NSO) released the first Advance Estimates (AE) of GDP for the year 2020-21. 

    • The real GDP at 2011-12 prices in 2020-21 has been estimated to contract by 7.7 per cent and nominal GDP at current prices by 4.2 per cent.

    • In other words, Real GDP or GDP at Constant Prices (2011-12) in the year 2020-21 is likely to attain a level of Rs 134.40 lakh crore, as against the Provisional Estimate of GDP for the year 2019-20 of Rs 145.66 lakh crore, released on 31st May 2020.

    • The Real GVA at Basic Prices is estimated at Rs 123.39 lakh crore in 2020-21, as against Rs 133.01 lakh crore in 2019-20, thereby showing a contraction of 7.2 percent.

    • As per quarterly estimates of NSO, real GDP contracted by 15.7 percent in first half of 2020-21.

    • Real GDP on a quarter-on-quarter basis grew at 21 percent from Q1: FY 2020-21 to Q2: FY 2020-21.

    • The AE of 2020-21 reflect continued resurgence in economic activity in Q3 and Q4 – which would enable the Indian economy to end the year with a contraction of 7.7 percent.

    • The continuous quarter-on-quarter growth endorses the strength of economic fundamentals of the country to sustain a post-lockdown V-shaped recovery.

    • On the demand side, real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8 percent.

    • On the supply side, agriculture is estimated to register a positive growth of 3.4 percent against 4.0 percent as per the PE of 2019-20.

    • In the manufacturing sector, electricity sector is estimated to register a positive growth of 2.7 percent.

    • The pandemic and associated public health measures have adversely affected the contact-sensitive services sector where trade, hotels, transport & communication are estimated to contract by 21.4 percent in FY:2020-21.

    • Also sadly, on the demand side, real GDP in 2020-21 in fixed investments is on negative -14.5%, in exports its -8.3% and imports at -20.5% whereas on supply side real GVA in mining at -12.4%, manufacturing at -12.6%, and services at -8.8%.

    • The movement of various high frequency indicators in recent months, points towards broad based nature of resurgence of economic activity.

    • The relatively more manageable pandemic situation in the country as compared to advanced nations has further added momentum to the economic recovery.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)