Growth had been on a steady decline since the last quarter of FY18, save for a marginal 0.1% sequential increase in Q4FY19.
The pre-revision 2019 GDP growth rate was 6.1%.
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.
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.
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.
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 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.
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.
“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.
If the recovery holds, we might be surprised and have a slightly lower contraction.
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 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.
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.
There is still space for 25-50 bps policy easing in the rest of FY21, says Tanvee Gupta Jain.
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.
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.
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
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.
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.
‘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.
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.
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.
"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.
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.
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.
'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.'
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.
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.
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. .
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 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
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
'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.
Ficci has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent.
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
As per the NSO, gross value added (GVA) came in at -22.8 per cent. It is the worst economic contraction on record.
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
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.
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.
“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.
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 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.
“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.
In a televised address, RBI Governor Shaktikanta Das said the global economy is heading into recession. He also said inflation outlook is "highly uncertain".
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.'
Last year the target was a range of between 6 per cent and 6.5 per cent.
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.
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 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.
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
Indian economy is likely to see a V-shaped recovery from the record contraction of 23.9% in the April-June quarter, on the back of higher government spending at a time when the consumption demand is likely to remain tepid till a vaccine for coronavirus is ascertained, the finance ministry said in its monthly economic report for August. India witnessing V-shaped recovery, but uncertainty to impact demand: Finance Ministry
The critical issue in the next 12 to 18 months is the extent of the damage done to the loan portfolios of banks and NBFCs, in particular their consumer loan portfolios.
While the GDP crash has been steep and has been triggered by the political decision of imposing lockdowns, the recovery path is going to be gradual, says Swaminathan Aiyar of The Economic Times. He also shares his thoughts on what could be the critical factors that could help induce growth, in this series of Swami Speaks. Watch!Political decision triggered steep crash in GDP but recovery will be slow: Swaminathan Aiyar
Recreating growth in the medium term is likely to come from sectoral strategies across 10 key sectors constituting most of India’s GDP. Dormant resources — both of enterprises and governments — must be put into service, requiring a special focus on balance sheets.
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
Asia's third-largest economy began slowing last year, but a countrywide lockdown implemented by Prime Minister Narendra Modi on March 25 halted economic activity completely.
‘We are forecasting real GDP growth to come back up to 3.5% in fiscal 22’
India's ability and willingness to repay debt is gold standard, CEA said making a case for ratings upgrade.
The slump may have reached its bottom with India's growth expanding at 4.7% in the quarter ended December 31, compared to the previous quarter. The economy had grown at an over six-year low of 4.5% in the previous quarter. In line with expectations, India's GDP growth rate bottomed out during the third quarter of the current fiscal and inched up to 4.7 per cent from 4.5 per cent reported for the previous quarter. India’s GDP growth in full FY19 had stood at 6.8 per cent.India's Q3 FY20 GDP growth inches up at 4.7% vs 4.5% in previous quarter
However, they believe the rural recovery is unlikely to support such pace in subsequent quarters as overall, the per capita monthly expenditure in urban areas is at least 1.8 times of rural areas and rural wage growth in real terms might still be negative.
The agency says prospects of further reforms to support business have diminished.
The core sector contracted by a record 38% in April as the lockdown hit all eight infrastructure sectors, according to data released separately. Cement output fell 86% while fertilisers and crude oil shrank 4.5% and 6.4%, respectively, in April.
The govt has revised growth for the first three quarters of FY20 to 5.2% in Q1, 4.4% in Q2 and 4.1% in Q3.
The country's GDP growth is likely to be at 3.6 per cent in January-March 2020, Crisil has said.
June was the fourth successive month of contraction. Factory output declined 57.6% in April and 33.9% in May, months during which a lockdown was in place to curb the spread of Covid-19.
India could witness a negative growth of 4.5% in 2020 fiscal, but could grow at a healthy growth rate of 6.3% in 2021 fiscal, Country Risk & Global Outlook report by Dun & Bradstreet released in August said.
Indian economy may expand by around 5% in the next financial year,ex-RBI guv Duvvuri Subbarao said.
The GDP growth was below a revised - and greatly increased - 5.1% growth rate for the previous quarter.
In a note on Monday, Ind-Ra revised its economic growth estimate for the country from its forecast of 3.6 per cent published on March 30, 2020 to to 1.9 per cent.
Earnings estimates for FY2021-22 have already seen sharp cuts in recent weeks.
Moody's had, in November 2019, downgraded India's outlook to negative from stable on concerns of lower economic growth. The agency had, however, affirmed country's 'Baa2' rating. In its update to the November forecast released on Friday, the agency said India's credit profile is supported by its large and diverse economy, and stable domestic financing base.
The IMF on Tuesday projected a GDP growth of 1.9 per cent for India in 2020.
The National Statistics Office has forecast India’s GDP growth to slip to an 11-year low of 5% in FY20. Manufacturing growth in 2019-20 is seen at 2% year on year, which is a 15-year low, as against 6.9% growth in FY19. Construction growth is seen slipping to a six-year low of 3.2% in FY20 from 8.7% in the last fiscal.