Page 204 - NHB AR 2020-21-3 complete- Print (1)
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recovery process in the economy is not expected to be as pronounced as it was during the first
wave. India’s GDP, according to World Bank, is expected to expand at 8.3 percent in 2021-22
and the activity is expected to benefit from policy support.
1.2 State of the Indian Economy
The world has entered its second year in the fight against COVID-19 pandemic. The last
year saw near complete standstills which severely compressed economic activities across the
globe. The Indian economy has been badly hit by the pandemic, with highest output losses.
Aggregate supply contracted massively due to supply chain disruption, forced business
closure and aggregate demand collapsed due to employment-related income loss, heightened
the uncertainty about the future.
The economic impact of COVID-19 has been substantial and broad-based. The spread of
the virus and subsequent containment measures disrupted economic activity in the April-
June quarter of 2020, with a GDP contraction of 24.4 per cent. (Table -1). The contraction
moderated to 7.4 per cent year-on-year in Q2FY21. The situation has improved since then
with the economy recuperating at a faster than anticipated pace in the second half of the year
and the growth returned to positive territory in Q3FY21 and Q4FY21 with 0.5 per cent and 1.6
per cent respectively.
Table - 1
Sectors (GVA at Basic FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21
Prices) (y-o-y) % 3.6
-7.0
Agriculture 4.3 3.5 3.0 4.5 3.1 -8.5
-7.2
Industry -1.2 -35.8 -3.0 2.9 7.9 1.9
Mining & Quarrying -2.5 -17.2 -6.5 -4.4 -5.7 -8.6
-8.4
Manufacturing -2.4 -36.0 -1.5 1.7 6.9 -18.2
Electricity, gas, water 2.1 -9.9 2.3 7.3 9.1 -1.5
supply & Other services -4.6
Construction 1.0 -49.5 -7.2 6.5 14.5 -7.3
Services 7.2 -21.5 -11.4 -1.2 1.5
Trade, hotels, transport 6.4 -48.1 -16.1 -7.9 -2.3
communication & others
Financial, Real Estate & 7.3 -5.0 -9.1 6.7 5.4
Professional service
Public administration, 8.3 -10.2 -9.2 -2.2 2.3
defence & other services
GDP 4.0 -24.4 -7.4 0.5 1.6
Source: Central Statistical Organisation (CSO), MoSPI
Across the sectors, contraction in growth was observed in FY21 over FY20. Growth in
agriculture, electricity & gas under manufacturing sector shows the declining Y-o-Y growth.
184 | Annual Report 2020-21
wave. India’s GDP, according to World Bank, is expected to expand at 8.3 percent in 2021-22
and the activity is expected to benefit from policy support.
1.2 State of the Indian Economy
The world has entered its second year in the fight against COVID-19 pandemic. The last
year saw near complete standstills which severely compressed economic activities across the
globe. The Indian economy has been badly hit by the pandemic, with highest output losses.
Aggregate supply contracted massively due to supply chain disruption, forced business
closure and aggregate demand collapsed due to employment-related income loss, heightened
the uncertainty about the future.
The economic impact of COVID-19 has been substantial and broad-based. The spread of
the virus and subsequent containment measures disrupted economic activity in the April-
June quarter of 2020, with a GDP contraction of 24.4 per cent. (Table -1). The contraction
moderated to 7.4 per cent year-on-year in Q2FY21. The situation has improved since then
with the economy recuperating at a faster than anticipated pace in the second half of the year
and the growth returned to positive territory in Q3FY21 and Q4FY21 with 0.5 per cent and 1.6
per cent respectively.
Table - 1
Sectors (GVA at Basic FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21
Prices) (y-o-y) % 3.6
-7.0
Agriculture 4.3 3.5 3.0 4.5 3.1 -8.5
-7.2
Industry -1.2 -35.8 -3.0 2.9 7.9 1.9
Mining & Quarrying -2.5 -17.2 -6.5 -4.4 -5.7 -8.6
-8.4
Manufacturing -2.4 -36.0 -1.5 1.7 6.9 -18.2
Electricity, gas, water 2.1 -9.9 2.3 7.3 9.1 -1.5
supply & Other services -4.6
Construction 1.0 -49.5 -7.2 6.5 14.5 -7.3
Services 7.2 -21.5 -11.4 -1.2 1.5
Trade, hotels, transport 6.4 -48.1 -16.1 -7.9 -2.3
communication & others
Financial, Real Estate & 7.3 -5.0 -9.1 6.7 5.4
Professional service
Public administration, 8.3 -10.2 -9.2 -2.2 2.3
defence & other services
GDP 4.0 -24.4 -7.4 0.5 1.6
Source: Central Statistical Organisation (CSO), MoSPI
Across the sectors, contraction in growth was observed in FY21 over FY20. Growth in
agriculture, electricity & gas under manufacturing sector shows the declining Y-o-Y growth.
184 | Annual Report 2020-21
