July 12, 2020
2 mins read

Indian Economy Expected To Record A Negative 4.5 Per cent Growth Rate

Rupees.
FICCI.

With economic activities coming to a halt amid the Covid-19 pandemic and the lockdown, the Indian economy is expected to record a negative 4.5 per cent growth rate in the current financial year, according to the FICCI’s Economic Outlook Survey.

The minimum and maximum growth estimate stood at (-) 6.4 per cent and 1.5 per cent, respectively, for FY21, it said. The quarterly median forecasts indicated 14.2 per cent contraction in the gross domestic product (GDP) in the first quarter of FY21, it added.

The signs of an impending slowdown have been sharply accentuated by the Covid-19 pandemic-induced lockdown. The Covid-19 pandemic has severely hit global as well as domestic growth.

The current round of the survey, conducted in June, drew responses from leading economists representing industry, banking and financial services sectors.


The economic activity-wise annual forecast indicated a median growth of 2.7 per cent for agriculture and allied activities for FY21. Agriculture seems to be the only sector with a silver lining.

There’s an apparent upside as far as the performance of monsoon was concerned this year with enough water in reservoirs, it said.

The rural sector, supported by a steady agriculture performance and hopefully a limited number of Covid-19 cases, will be a key demand generator this year, as per the survey.

Further, the direct income support through the PM-KISAN and increased allocation to MGNREGA were helping the returnee migrants, lending support to the rural economy, it showed.

Farmers growing strawberry in Netarhat, Jharkhand.

The industry and services sectors are expected to contract by 11.4 per cent and 2.8 per cent, respectively. “Weak demand and subdued capacity utilisation were manifesting into a drag on investment, and the pandemic has further extended the timeline for recovery,” it said.

Even though activity in some sectors, like consumer durables and FMCG (fast-moving consumer goods), is gaining traction, most companies are still operating at low capacity utilisation rates. Labour availability and feeble demand remain major issues.

Therefore, fresh investments would be difficult to come by in the near-to-medium term, the survey predicted.

Absence of demand stimulus, a second wave of the pandemic and continuation of social distancing and quarantine measures would weigh heavily on growth prospects, it said.

“With demand and investment outlook muted, robust government expenditure has been the only saviour. Nonetheless, growth is likely to bottom out after the second quarter of FY21,” FICCI survey said.

Also Read-India Covid Tally Reaches 8.5 Lakh

Previous Story

Shah: 130 Cr People Are United In Fighting Covid Threat

Next Story

Joe Biden Wins The Primary In the State of Louisiana

Latest from Business

Apple Appoints Sabih Khan as New COO

Khan will take over from Jeff Williams, who is stepping down from the role this month and will retire later this year…reports Asian Lite News Apple has announced that Sabih Khan, an

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and

India to Empower Global South

India is emerging as a pivotal force in the global transition to clean energy, with Union Minister for New and Renewable Energy, Pralhad Joshi, asserting that the country is empowering the Global

Maruti’s Global Push Breaks Record

June shipments hit 37,842 units, signalling robust global demand Maruti Suzuki India recorded its highest-ever monthly exports in June, shipping 37,842 units and marking a new milestone that highlights the company’s expanding
Go toTop