Categories: Business

India GDP to shrink by 6 percent this financial year says DBS


DBS on indian economy

new Delhi. Singapore-based brokerage company DBS on Wednesday forecast a 6 percent decline in gross domestic product (GDP) in FY 2020-21, in view of rising cases of Kovid-19 infection in economically important states. Earlier, the brokerage company had predicted a growth rate of below 4.8 percent in the current financial year. According to the DBS report, only 7 percent of the districts in the economically important states Maharashtra, Tamil Nadu and Gujarat and Karnataka and Andhra Pradesh have 70 percent cases. Maharashtra, Tamil Nadu and Gujarat account for 30.5 percent of the country's total economic output.

The report said that the epidemic would have a profound impact on the economy and recovery would take time. Caurana virus infection cases in the country have risen to more than 11.5 lakhs, while due to this, about 29,000 people have died. This makes India the third most affected country after America (39 lakh cases) and Brazil (2.2 million cases). DBS economist Radhika Rao said, "The infection situation in the country has not stabilized so far and the epidemic is going to have a macroeconomic impact." In view of this, we estimate that economic growth will be negative 6 percent below zero in 2020-21. "The transition rate is not yet stable, which means that there will be a big drop in GDP in the first quarter of the current financial year. . While there may be a slight improvement in the second quarter, growth may return in the third quarter.

He said, "According to our analysis, seven districts of economically important states have 70 percent cases of total infection. These states are Maharashtra (14 percent contribution to national GDP), Tamil Nadu (8.5 percent), Gujarat (8 percent) and Karnataka and Andhra Pradesh. "Not only this, some states are still putting 'lockdown' at the local level. Huh. Lockdown has been imposed in Pune and Bengaluru of Bihar, Maharashtra till 31 July. The report states that some states have imposed restrictions on domestic flights and if some other states take such steps, this will again affect the supply regime. Also, there will be difficulties for manufacturers, including vehicle manufacturers and electronic companies. Regarding the recovery, Rao said that it would largely depend on rural demand and agricultural production. Agricultural production is projected to increase by 2 percent in the current financial year. This would provide some relief to the economy from softening non-agricultural production. He said that with the full opening of the economy, the government may offer stimulus packages or fiscal support in September / October.

This post was published on July 22, 2020 6:33 pm

Content Team

Recent Posts

Rupee ends 5 paise lower at 74.83 per dollar

Photo: GOOGLE Rupee vs dollat new Delhi. The rupee has fallen against the dollar on Wednesday due to the weakness…

NMDC hikes iron ore by Rs 300 per tonne, steel prices will also be affected

Photo: BLOOMBERGQUINT NMDC hikes iron ore rates by Rs 300 a tonne new Delhi. The country's largest iron ore mining…

Grain storage facilities to be built on vacant railway land, Paswan and Goyal discuss

Photo: THE HINDU Paswan pushes for fast-tracking setting up grain storage facilities on railways' surplus land new Delhi. Union Food…