India’s economic contraction moderated sharply to 7.5% in the second quarter of the current fiscal after recording a record 23.9% gross domestic product shrinkage in the first quarter of FY21.
"On the back of various reforms undertaken by the government in last 10 months along with a demand boosting and investment inducing Budget, the expectations of a positive GDP growth in Q3 and in Q4 FY 2020-21 are becoming strong," it added.
Government’s focus should be on providing thrust in infrastructure, healthcare and education, says the Helios Capital founder.
The statistics office on Friday revised the growth rate for India’s gross domestic product (GDP) for fiscal 2020 to 4% from 4.2% earlier. However, the growth estimate for FY19, was raised to 6.5% from 6.1%. As per the estimates, the savings rate rose in the last two years.
The Governor said the Union Budget 2021-22, has provided a strong impetus for revival of sectors such as health and well-being, infrastructure, innovation and research, among others.
The central bank retained the repo rate at their record low of 4 per cent and the reverse repo rate at 3.35 per cent.
Growth had been on a steady decline since the last quarter of FY18, save for a marginal 0.1% sequential increase in Q4FY19.
After contracting for two quarters in a row, the Indian economy recorded a 0.4 per cent growth in the October-December quarter, mainly due to good show by farm, manufacturing, services and construction sectors.
In terms of current prices, GDP for Q3 is estimated to have gone up by a credible 4.3%, over the like period in the previous year. It does reflect higher value addition, read dearer prices, in sectors like agriculture, given rigidities in supply amidst pandemic-imposed restrictions in delivery and logistics.
Finance Minister Nirmala Sitharaman tabled the Economic Survey 2020-21 in the Lok Sabha following which the house was adjourned. Today's Survey holds significance as the economy begins to recover from the pandemic-hit year. According to the survey, GDP growth for the next financial year (FY2021-22) is seen to be 11%.FM Sitharaman tables Economic Survey 2020-21 in Lok Sabha, FY22 GDP growth projected at 11%
Among the most-watched parts of the agenda are the presentation of an annual work report for 2021, and the release of China's 14th five-year plan, expected to include hundreds of pages spelling out priorities for the world's second-largest economy up to 2025.
The pre-revision 2019 GDP growth rate was 6.1%.
Projecting that the gross domestic product (GDP) may have returned to the black in the last quarter of the calendar year 2020, DBS Bank in the report said the full-year growth in real terms may be at a negative 6.8 per cent.
The sources of revenue collection have evolved over time. Various governments have explored multiple avenues to enhance revenues, including through national assets such as telecom, mining and monetisation of assets.
Arvind Panagariya on state of economy & what should the Finance Minister do in Budget 2021
The economy has been recovering steadily from a steep 6.8% slump in the first quarter, when an outbreak of COVID-19 in the central city of Wuhan, first detected in late 2019, turned into a full blown epidemic.
Gross domestic product rose 0.4% on the month after expanding 1.1% in September, the Office for National Statistics said, the weakest growth since output collapsed in April during the first lockdown.
Soumya Kanti Ghosh, group chief economic adviser at State Bank of India (SBI) said of the 41 high frequency leading indicators, 51 per cent are showing acceleration which should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth which is likely to surprise positively when the final numbers are out.
The Reserve Bank of India on Friday kept interest rates on hold while assuring to maintain support for reflating the economy by ensuring ample liquidity to manage the government's near-record borrowing. The six-member Monetary Policy Committee voted to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target. Tune in as ET Now consulting editor Mythili Bhusnurmath shares her views on the macro takeaways from the RBI policy statement. (Text: PTI)RBI monetary policy review: What to make of MPC's stance
‘Globally, the risk of inflationary pressure is going up and that is something we need to be really mindful of this year.’
The Union budget should provide more comfort on the longer-term growth prospects of India, which will be the key to the Indian equity market in the medium term.The market’s focus will shift to India’s medium-term growth prospects beyond the strong 9-11% real GDP growth in FY22.
I normally don’t use superlatives as frivolously as many do, but this Union Budget reminds me of the legendary Kapil Dev’s four sixes off Eddie Hemmings in the first cricket Test match series at Lord’s in 1990 to avoid a humiliating follow-on.
In her speech, Finance Minister Nirmala Sitharaman pegged total government expenditure for the current fiscal year at 34.5 trillion rupees ($472 billion). That’s $57 billion more than what analysts had forecast based on a muted April-to-November trend, extrapolated for a bump in December through March, the final four months of the accounting period.
Importantly, and perhaps more so after the pandemic, it calls for increasing investment in health infrastructure, by boosting public spending from 1% of GDP currently to 2.5-3.0% of GDP, along with the setting up of a sectoral regulator in light of the market failures due to information asymmetry.
For all the hardships that year 2020 had, the Economic Survey 2020-21 is mostly on expected lines. The Part II of the Survey presents the economic assessment of the year 2020-21.
India's economy is likely to grow by 11 per cent in the fiscal year beginning April 1 as a vaccine drive and rebound in consumer demand help it emerge from the carnage inflicted by a strict coronavirus lockdown, the Economic Survey said. The rebound will follow an estimated 7.7 per cent contraction in the GDP in the current financial year ending March 31, the annual document said. Tune in as ET Now consulting editor Mythili Bhusnurmath decodes key points and recommendations made in the Economic Survey of India 2020-21, tabled in Parliament by FM Nirmala Sitharaman on Friday. (Text: PTI)Economic Survey 2020-21 decoded for you
V-shaped recovery in manufacturing sector led by iron & steel, cement, pharma and auto cos: Economic Survey 2020-2021
“V-shaped recovery is well underway, as demonstrated by the recovery in GDP growth and the sustained resurgence in high frequency indicators such as power demand, E-way bills, GST collection, steel consumption,” the survey said.
Ind-Ra now expects 3Q FY21 GDP growth to come in at negative 0.8 per cent and 4Q FY21 GDP growth to turn positive at 0.3 per cent as against its earlier expectation it turning positive in 4Q FY22.
In an interview, Kumar also said the Centre's new agriculture reform laws are aimed at increasing the income of farmers and the present agitation was a result of misunderstanding and miscommunication which need to be removed.
If everything goes according to plan, India will be able to reap the fruits of its favourable demography over 2030s and 2040s, before she loses that edge in the 2050s, according to economists.
The data from the Commerce Department showed that the economy grew by an annualized rate of 33.1% in the third quarter, beating expectations, but leaving the economy 3.5% below where it was at the end of 2019.
While the government has said economic indicators suggest a broad-based recovery ahead, it forecasts the worst contraction since 1952 for the current fiscal year.
“The GDP forecast for FY2020 (2020-2021) is upgraded from 9.0% contraction to 8.0%, with GDP in H2 probably restored to its size a year earlier,” the multilateral lender said in its Asian Development Outlook Supplement (ADOS) for December, released on Thursday.
From an unprecedented 23.9% contraction in the June quarter, the economy is seen shrinking 8.6% in the September quarter, as per the central bank and 10.2% according to independent economists polled by ET. But, economists cautioned against getting carried away by the improvement.
The Nomura India Monthly Activity Indicator (NIMAI) rose sharply to -2.3% year-on-year in December against -7.7% in November following a substantial gain from -13.3% in September, the firm said in a report titled, ‘As virus recedes, growth proceeds’, on Wednesday.
The report said the economy is likely to witness positive growth in H2FY21, though some sectors will continue to record staggered recovery due to social distancing norms.
A lot of divestment proposals which could not fructify in FY21 might be carried over to FY22 and help the FY22 revenue collection.
If the recovery holds, we might be surprised and have a slightly lower contraction.
There is still space for 25-50 bps policy easing in the rest of FY21, says Tanvee Gupta Jain.
ET's Consulting Editor and noted economy commentator Swaminathan Aiyar lists out his suggestions for finance minister Nirmala Sitharaman's Union Budget 2021-22, scheduled to be presented in Parliament next month. Watch now.Swaminathan Aiyar shares his suggestions for FM Sitharaman's Budget 2021
The economic cycle bottoming out is more akin to the 2003-2007 cycle than the 2013-2017 cycle.
Prior to this, in November, the ministry had sought suggestions from the public through an online portal, the deadline for which fell on December 7.
On a monthly basis, PHDCCI EBMI (Economic and Business Momentum Index) has shown steady recovery from the lows of 78.3 in April 2020 to 85.7 in May 2020, 91.6 in June 2020, 95.5 in July 2020, 95.9 in August 2020, 96.5 in September 2020 and 96.7 in October 2020.
Dynamic asset allocation funds take away the entire emotional issue out of investing and help investors take a balanced decision, says Vinay Paharia
Congress leader and Rajya Sabha member, Anand Sharma on December 21 submitted the COVID report in the upper house. While speaking to ANI, Anand Sharma informed that India’s GDP was adversely affected in first quarter but country did make a comeback in the second. Anand Sharma said, “The first quarter of this year was the worst as GDP was adversely hit. However, we made a comeback in second quarter and we hope that in the remaining two quarters as well, the balance of recovery will be maintained.” Further applauding the infrastructure, Sharma said, “India has increased its infrastructure and I congratulate Central and state governments for it as they worked together for it. The country stood in the face of this crisis.” India’s GDP made comeback in 2nd quarter: Anand Sharma
According to the report, the consensus forecasts of GDP growth for FY2022 over FY2020 stopped falling after October 2020 (currently at (-) 1 per cent). Analysts at Credit Suisse expect these estimates to be revised upwards.
Over half or about 58% of these indicators, such as revenue earning of freight traffic, weekly food arrival and petrol and diesel consumption showed acceleration in the third quarter, the report released on Wednesday said.
The IMF estimates China will grow by 8.2% next year, down a full percentage point from the IMF’s April estimate but strong enough to account for more than one-quarter of global growth. The U.S. is expected to rally to a 3.1% increase which will account for 11.6% of global growth in 2021 in purchasing power parity terms.
Union Finance Minister Nirmala Sitharaman attended 4th Annual India Energy Forum by CERA Week on Oct 27. She said, “India's growth this year will be negative or near zero. Next year India can be one of the fastest growing economies. Festival season has commenced in India, as a result of which I expect the demand to go up and therefore, be sustainable also.” She further said, “Foreign Direct Investment (FDI) inflow between April and August of 2020, grew by about 13% compared to non-COVID 2019's comparable period. Globally, we are one of the lowest in terms of Corporate Taxation. For any investment which comes into manufacturing and which commences production by 31st March 2023, they shall be paying only 15% Corporate Tax.”India’s GDP growth will be negative or near zero this fiscal year: FM Nirmala Sitharaman
There was a "very firm lockdown" imposed beginning March 25 as the government put lives before livelihood. The lockdown also gave time to do preparatory work to deal with the pandemic. But with unlock, macroeconomic indicators have shows signs of revival, Sitharaman said.
Economic indicators show encouraging signs; govt committed to minimum governance to boost investment: PM Narendra Modi
The Prime Minister said that India has been through ups and downs in 2020 but things have improved fast. There is a road map for recovery, he said.
‘You are really going to see this space march ahead versus the very obvious popular benchmarks and popular indices’
The RBI Monetary Policy Committee (MPC) in its meeting announced continuance with the status quo even though it is up beat about the growth story of the India in the post-Covid pandemic era. This could hurt in the long run, says Mythili Bhushnurmath, Consulting Editor, ET Now. Watch!Opinion: Why RBI MPC continuance with status quo may hurt in the long run
The Reserve Bank of India on Friday left benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying more rate cuts in the future if need arises to support the economy hit by the COVID-19 pandemic. The central bank said retail inflation is likely to remain elevated and pegged it at 6.8% for the third quarter of the current fiscal, while revising real GDP growth projection for FY 20-21 to -7.5%. RBI Governor Shaktikanta Das briefed media on the Monetary Policy Committee's (MPC) decisions. Watch highlights. (Text: PTI)Top takeaways from RBI's December monetary policy review
The second half of the fiscal year is expected to show positive growth, Shaktikanta Das said.
“The sustained increase in major economic activity indicators beyond September, raises hopes of a better performance in Q3 in alignment with the global scenario,” the ministry said in the report released on Thursday.
India liberalised its economy in 1991, and reduced its applied trade-weighted real tariffs from 56.4% in 1990 to 7.33% in 2015 and to 4.88% in 2018 — well below India’s WTO threshold levels, through several waves of tariff reduction.
"Based on a series of high frequency data, there is a distinct trend of sequential month-on-month improvement. There is a lot of catch up required but suffice to say that worst is behind us," he said at a virtual conference organised by the Canada-India Business Council.
The Infy founder also pitched for developing a new system that should allow every player in every sector of the country's economy to operate at full steam with suitable precautions.
After two consecutive quarters of negative growth, the Indian economy is technically in recession for the first time. GDP in the June quarter’s recorded 23.9% contraction. It grew 4.4% in the September quarter last year.
'Preserving medium-term growth potential of above 7 per cent is not just important, but perhaps the only solution to our macro challenges and the best response to geopolitical tensions too.'
Panasonic India’s revenue fell 9% to Rs 4,338 crore in FY20 from a year earlier, while net loss widened to Rs 490 crore, according to the latest regulatory filings with the Registrar of Companies. The company’s revenue touched a peak of Rs 5,590 crore in 2016-17, when it was profitable, too.
Goyal in an interview to PTI said the management of the COVID-19 pandemic and gradual unlocks announced by the government have helped in avoiding multiple COVID-19 peaks. The growth estimates by different agencies are being continuously revised, she said.
It further said India fares the worst in its Asia recovery scorecard, implying that the country will likely take the longest among major economies to converge to its pre-coronavirus growth level. .
Fitch expects the government to stay reform-minded over the next few years, at both the central and state level, but added that implementation risks were significant.
The first quarter GDP contraction compares with 3.1 per cent growth in the preceding January-March quarter and 5.2 per cent expansion in the same period a year back.
Q1 numbers of GDP for the financial year 2020-21 have shown unprecedented contraction, never seen in the last 40 years. As experts say that the Covid pandemic fallout on Indian economy may not be over yet, TK Arun of The Economic Times does an impact analysis and lists out the possible options for GOI in times to come.Unprecedented Q1 GDP contraction: Implications and challenges ahead for India
Attributing the 23.9 per cent contraction in GDP in April-June to the coronavirus lockdown, Chief Economic Adviser K V Subramanian on Monday said the country will witness better performance in the subsequent quarters, aided by a 'V-shaped' recovery in various sectors.GDP growth decline due to intense lockdown, expect a V-shape recovery: CEA KV Subramanian
Ficci has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent.
The "flash estimates" for quarterly gross domestic product did not have a breakdown on how the oil and non-oil sectors performed in the three-month period to the end of September. The authority said the estimates came out at the end of the reference quarter, when information was still partial and subject to a high degree of approximation.
'We moved from 50% to 90% of normalcy in about three-and-a-half, four months. But the 90% to 100% move will happen over the next six to seven months.'
The agency, however, expects India's gross domestic product (GDP) to rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak base of FY21.
Terming the 23.9 per cent fall in the economic growth in June quarter alarming, former Reserve Bank Governor Raghuram Rajan has said bureaucracy should come out of complacency and take meaningful action. Emphasising on the importance of government relief or support in the given scenario, he pointed out that it is "meagre" so far.Raghuram Rajan raises concerns on India's GDP growth data, says numbers should alarm us all
While improvements in rural demand will increase the sector’s share in quarterly figures of gross domestic product, those are insufficient to further cushion the impact of the pandemic and take the economy to ‘near zero’ growth this fiscal year, according to economists ET spoke to.
The goods and services tax (GST) collected in October rose to Rs 1.05 lakh crore, crossing the Rs 1 lakh crore mark for the first time since February this year, reflecting a pick-up in economic activity and demand. The finance ministry in a statement said on Sunday that the total number of GSTR-3B returns filed till October 31, 2020 is 80 lakh. The gross GST revenue collected in October 2020 is Rs 1,05,155 crore, of which CGST is Rs 19,193 crore, SGST is Rs 5,411 crore, IGST is Rs 52,540 crore (including Rs 23,375 crore collected on import of goods) and cess is Rs 8,011 crore (including Rs 932 crore collected on import of goods), the ministry said.GST collection surpasses Rs 1 lakh crore mark in October, first time since February
As per the NSO, gross value added (GVA) came in at -22.8 per cent. It is the worst economic contraction on record.
The Japanese brokerage firm said no quarter would see positive growth in the ongoing fiscal, resulting in -6.1% gross domestic product (GDP) growth rate for FY21.
The Covid-19 crisis means India’s GDP will crash this year by anywhere from 5% to 10%. Government revenues are collapsing, while emergency relief spending will vastly exceed any spending cuts or new taxes on oil. So, the fiscal deficits of the central and state governments will skyrocket into double digits.
Aditya Puri, the outgoing chief executive of HDFC Bank, said that negative sentiment on India's economy was overdone in an exclusive conversation with ET NOW’s Managing Editor Nikunj Dalmia. Indian economy is rebounding with zooming sales in select sectors after shrinking 23.9% in the first quarter. While the rebound is patchy, it may still help the country to end the year with a 9.5% contraction, according to Reserve Bank of India (RBI) projections.Negative sentiment on Indian economy was overdone: Aditya Puri
Consumer staples and other essentials like pharma were expected to do well and those have reported good numbers. But earnings have genuinely surprised in the IT sector. Earnings and commentary have been better than expected.
Covid-19 pandemic will curtail India’s GDP growth in FY21, first in four decades: Kumar Mangalam Birla
Given the fog of uncertainty all around, it is hard to be prescient in these times, Birla said. A stringent national lockdown to slow the spread of the pandemic started in the last week of FY2020 and remained active to varying degrees in different geographies through most of the first quarter of 2020-21.
“The stable outlook reflects our view that India's contraction in fiscal 2021 will be followed by a significant recovery, which will stabilize the country's broader credit profile,” S&P said. The outlook was underpinned by India’s above-average long-term real GDP growth, sound external profile, and policy stability, it said.
In 2019, India's GDP in Purchasing Power Parity (PPP) terms was 11 times more than that of Bangladesh while population was eight times more. In PPP terms, India's per capita GDP in 2020 is estimated by IMF at USD 6,284 as compared to USD 5,139 for Bangladesh, according to the sources.
In per capita GDP terms, India was significantly above Bangladesh till a few years ago, but the gap has been substantially closed owing to the country's rapidly-rising exports. Besides, during the intervening period, while India's savings and investments remained lukewarm, the corresponding numbers for Bangladesh saw a sizeable surge.
The Reserve Bank of India (RBI) on Thursday said inflation is expected to be at elevated levels during the second quarter but may ease in the second half of the current fiscal year. On the economic growth, RBI Governor Shaktikanta Das said that India's real gross domestic product will contract in the first half of FY21 as well as full financial year.Elevated Inflation in Q2, negative real GDP growth in FY21: RBI’s MPC shares outlook for economy
Stating that the developments arrested the nascent recovery that had set in during May-June 2020, the latest estimate took the agency to the lower end of the spectrum of growth expectations for the economy. In May, ICRA had said the country would see a 5% contraction in FY21.
In a televised address, RBI Governor Shaktikanta Das said the global economy is heading into recession. He also said inflation outlook is "highly uncertain".
Last year the target was a range of between 6 per cent and 6.5 per cent.
“With the pandemic continuing in India for over six months, we sense that economic agents are now adapting to the crisis, resulting in a graduated recovery to a new post-Covid normal,” said Aditi Nayar, principal economist at ICRA.
China remains cautiously optimistic about its economic growth prospects despite the global pandemic, claiming that the world’s second-largest economy is steadily recovering from a virus-induced slump.
'This time, we are more constructive on residential real estate versus commercial real estate.'
India's GDP could marginally expand 1.5% or even contract 0.9% in this financial year, the Confederation of Indian Industry (CII) said in a report and suggested several measures to address the economic challenges posed by the Covid-19 pandemic.
The real question is how much better have we got in May, June, July and August? Are we atpre-Covid levels? Or is it that though we are better than in April 2020, we have a long way to go before reaching economic and business normalcy? The answer is clear. Yes, we are doing better than April 2020. But normalcy is along and arduous road ahead.
Asian Development Bank, Nomura, as well as S&P have revised India's GDP forecasts for FY2020-21 to minus nine per cent. Earlier ADB had expected a 4% contraction for the same period. Last week, two other global rating agencies Moody's and Fitch projected Indian economy to contract 11.5 per cent and 10.5 per cent respectively in the current fiscal. However, Goldman Sachs has estimated the contraction at 14.8 per cent. Domestic agencies - India Ratings and Research projected contraction at 11.8 per cent, while Crisil estimated contraction at 9 per cent. The latest forecasts have come amid massive 23.9% contraction in the June quarter.
The decline in GDP growth by around 8 per cent would also be associated with a decline in the gross fixed capital formation, the agency said.
The latest estimates place year-on-year decline in GDP during April-June quarter at 23.9%. What this means is that if the economy were to shrink by this same percentage in the remaining three quarters, growth rate in 2020-21 would turn out to be –23.9%.
The drastic downward revision for both the firms, which was over twice the earlier estimates of -5% by Fitch and -5.3% by Ind-Ra, was due to the worse-than-expected April-June quarter performance of -23.9%.
After the Japanese research firm Nomura finding some green shoots of rein September, now American investment bank Goldman Sachs, is seeing a full-bound recovery by 2021. Even ratings firm India Ratings has forecast a revival in FY'22.
India's economic growth slipped to 3.1 per cent in the January-March quarter of 2019-20 showing impact of COVID-19 pandemic. The gross domestic product (GDP) had expanded by 5.7 per cent in the corresponding quarter of 2018-19, according to data released by the National Statistical Office (NSO) on Friday. In 2019-20, the Indian economy grew by 4.2 per cent against 6.1 per cent expansion in 2018-19.India GDP growth dips to 3.1% in Jan-Mar; 4.2% in 2019-20
15th finance commission to submit its report by October end, panel might treat FY21 as zero year: NK Singh
The economic advisory panel of the 15th finance commission on Friday suggested providing a range rather than a number as fiscal deficit targets for both the Centre and states in a report, the commission's chairman N K Singh said on Friday. Singh said the 15th Finance Commission will submit its four volume final report by October-end.15th finance commission to submit its report by October end, panel might treat FY21 as zero year: NK Singh