India's GDP contracts 7.3% in FY21; grows at 1.6% in Q4

India's economy grew at 1.6 per cent in the fourth quarter of 2021-21, recording a slight pickup in GDP growth amid the Covid-19 second wave hitting the economy hard. In the full fiscal year, the economy shrunk by -7.3 per cent as the Covid-19 pandemic ravaged the economy. The contraction in FY21 GDP is worse in more than 40 years, the government data shows.

"GDP at Constant (2011-12) Prices in Q4 of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 percent," the Ministry of Statistics & Programme Implementation (MoSPI) said in a statement on Monday, adding that the growth in GDP during 2020-21 is estimated at -7.3 per cent as compared to 4.0 percent in 2019-20.

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The ministry said the real GDP at constant (2011-12) prices in 2020-21 is now estimated to attain a level of Rs 135.13 lakh crore against the first revised estimate of GDP for 2019-20 of Rs 145.69 lakh crore. GDP at current prices in 2020-21 is estimated at Rs 197.46 lakh crore against the first revised estimates of Rs 203.51 lakh crore in 2019-20, showing a decline of -3.0 per cent as compared to 7.8 percent growth in 2019-20, said the ministry.

GDP at constant (2011-12) prices in Q4 of 2020-21 stood at Rs 38.96 lakh crore against Rs 38.33 lakh crore in Q4 FY20, showing a growth of 1.6 per cent.

On the lines of the forecasts by professional agencies, the economy continued its expansion in the January-February quarter though the recent rise in infections played the spoil sport. This is the second consecutive quarter when the Indian economy has grown in the positive territory after a negative growth in two previous quarters.

Also read: Covid-19 impact: Q3 GDP revised to 0.5% from 0.4%

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The economy has shown signs of improvement compared to the previous quarters, but the current Covid-19 situation in the country has forced the forecasters to trim their GDP projections for both Q4 and Q1 of FY22.

While most analysts had projected a double-digit growth in FY22, albeit on a lower base, the second wave of COVID-19 pandemic and lockdowns imposed by state governments to control the surge in cases have led to revisions in growth estimates. For the first quarter of 2021-22, median forecasts by rating agencies and major economists stand at 21.6 per cent, which is lower than 23 per cent predicted earlier.

State-wise lockdowns and subsequent shutting down of the economy, although partially, has forced millions out of work and several small businesses to shutter down.

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India's economy had contracted during the first half of FY21, before returning to positive territory in October-December quarter with a growth of 0.4 per cent. The economy reported growth in the December quarter after two quarters of contraction. GDP had seen revival, albeit marginally, as economic activities resumed after a long and arduous lockdown and overall sentiment improved with the rollout of vaccination drive.

In the April-June quarter of FY21, the economy shrunk by 24.4 per cent, which improved to -7.3 per cent contraction in July-September. On a YoY basis, the Indian economy grew 4.18 per cent in FY20; 6.12 pr cent in FY19; 7.04 per cent in FY18; 8.26 per cent in FY17; and 8 per cent in FY16.

Estimates including growth rates of Q1, Q2 and Q3 of 2020-21 released earlier have been revised in accordance with the revision policy of National Accounts. The Q3 GDP growth has been revised from 0.5 to 0.4 earlier, while Q2 GDP de-growth stands at -7.4 compared to - 7.3 earlier.

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