The IHS market said on Friday that the Indian economy is likely to grow again with an increase of 8.9 percent in April 2021 compared to the previous year in economic activity.
The National Statistical Organization (NSO) on Thursday predicted that the economy would contract 7.7 percent in the current fiscal year ending in March, the worst performance in four decades.
“The Indian economy faced a severe recession in 2020,” IHS Markit said in a note. “The worst contraction occurred during the period from March to August, with the economy showing a strong rebound in economic activity since September.” Contracted by a record 23.9 percent in the April-June quarter after the national lockdown to prevent the spread of GDP coronaires. The contraction declined to 7.5 per cent in the September quarter.
“During the fourth quarter of 2020, India’s industrial production and consumption expenditure has shown a rebound.
“October data showed industrial production increased by 3.6 percent in April 2020 compared to 3.6.5 percent year-on-year,” said IHS.
Noting that business conditions in the manufacturing sector have improved significantly, it said factory orders rose during December due to loosening of Kovid-19 restrictions, strengthening demand and improving market conditions.
Although India faces a major challenge to immunize its population of 1.4 billion people, it is about to launch its Kovid-19 vaccination program.
The health regulator has approved the Oxford / AstraZeneca vaccine for emergency use.
A significant benefit for India is that the Oxford / AstraZeneca vaccine is already being manufactured in the country by the Serum Institute of India, which suggests that it will be able to manufacture 100 million Kovid-19 vaccine doses per month by April 2021 would be able.
“With the Indian economy already showing a significant improvement in domestic economic activity in the fourth quarter of 2020, the percentage of Indian GDP growth in the fiscal year 2021-22 is 8.9 per year.” .
India Ratings & Research said that the NSO projections for GDP growth in FY15 mean that the size of the Indian economy is expected to come down to Rs 134.40 lakh crore in FY21, compared to Rs 145.66 lakh crore in FY15. .
“All other components from the demand side, such as private consumption, investment, exports and imports, are contractual estimates for FY15, except government consumption.”
Although headwaves stemming from Kovid-19-related challenges are unlikely to be overcome by mass vaccination, the ratings agency said it expects GDP growth to be positive in 4QFY21 (January-March) and to come in at 9.6 FY22. GDP is per cent.
Arun Singh, Global Chief Economist, Dun & Bradstreet, said the first advance estimate of GDP growth for FY21 is lower than the RBI’s 7.5 per cent contraction, but more optimistic than estimates provided by many institutions, global and domestic.
“We expect the final GDP data to be slightly lower than earlier advance estimates when the data for the informal economy are included and adjusted,” he said.
While investment and consumption demand figures were expected to show a strong decline, the government’s 5.8 percent increase in final consumption expenditure, the lowest since FY15, was not quite as predictable.
“During uncertain times, only the government can increase the multiplier effect in the economy. The hope is that the government rests on the government to increase its spending to revive private sector sentiment, overall demand and large-scale private investment, ”said Singh. “Thus, despite the stimulus measures announced by the government during the year, expectations of additional measures from the Union Budget remain high.” Dharmakirti Joshi, Chief Economist, CRISIL said that only two sectors are above last year’s levels – agriculture and electricity, gas and water supply – and services were expected to be the worst hit as expected.
“With some improvement in the industry in the second half, there will be a need to give some support to the services sector in the upcoming budget, which is still going on,” he said. ”
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