India's Gross Domestic Product (GDP) contracted 7.3% in 2020-21, as per provisional National Income estimates released by the National Statistical Office on Monday, marginally better than the 8% contraction in the economy projected earlier. GDP growth in 2019-20, prior to the COVID-19 pandemic, was 4%.
The fourth quarter of 2020-21 recorded a growth of 1.6% in GDP, the second quarter of positive growth, after the country had entered a technical recession in the first half of the year. The Gross Value Added recorded 3.7% growth in Q4, compared to 1% in Q3. GVA had contracted 22.4% and 7.3% in the first and second quarters of 2020-21.
The GVA in India's economy shrank 6.2% in 2020-21, compared to a 4.1% rise in the previous year. Only two sectors bucked the trend of negative GVA growth - Agriculture, Forestry and Fishing (which rose 3.6%) and Electricity, Gas, Water Supply and other Utility Services (up 1.9%).
GVA from Trade, Hotels, Transport, Communication and Broadcasting-related services recorded the sharpest decline of 18.2%, followed by Construction (-8.6%), Mining and quarrying (-8.5%) and Manufacturing (-7.2%).
GDP had contracted 24.4% in the April to June 2020 quarter, followed by a 7.4% shrinkage in the second quarter. It had returned to positive territory in the September to December quarter with a marginal 0.5% growth.
The National Statistical Office attributed the improvement over its earlier growth estimates, to the improved performance of indicators, used in compilation of GVA, in the fourth quarter of 2020-21, owing to calibrated and steady opening of the economy.
"In addition to this, revised data received from some source agencies for the previous quarters and receipt of GST data for third quarter along with fourth quarter have also contributed to the revision in the estimates," the NSO said.
The NSO also warned that data collection had been impacted as much as any other activity by the pandemic, so its estimates could undergo sharp revisions.
Early results on the performance of Corporate Sector for April-December 2020, which
were used in the second Advance Estimates (that projected an 8% contraction in GDP), have been revised using the latest available information, it said.
“Considering the current Covid situation, the statutory timelines for filing the requisite financial returns of fourth quarter have been extended by the Government. Consequently, the private corporate sector estimates of industries are based on other indicators like IIP, GST, etc. This may have implications on subsequent revision of these estimates,” it said