Forecast for FY21 GDP of India is Set to Decline

A survey done by FICCI has forecasted that there will be a 4.5?cline in the GDP of India in its FY21. The minimum and maximum growth percentages are estimated to be -6.4% and 1.5% for FY21.

COVID-19 has impacted the economy drastically with the nationwide lockdown and this has impacted the Indian economy as it is anticipated of a -4.5% growth rate in the financial year by the FICCI's Economic Outlook Survey.

In the survey, the estimated minimum and maximum growth rates are at -6.4% and 1.5% for FY21. The prediction for the quarterly median forecasts is at a 14.2?cline in the GDP in the first quarter of FY21.

The forthcoming slowdown in the economy got further accelerated due to the COVID-19 nationwide lockdown.

The growth of the domestic and the international economy has been affected due to the pandemic. The sector that will not be getting very drastically effected is the agriculture sector, as the prediction of a median growth of 2.7% is for this sector.

According to the survey, the rural sector is going to be the demand developed in the current and it will be getting the support of good monsoon, balanced agriculture performance, and less COVID-19 cases.

The government of India is not leaving any stone unturned to provide support to the rural economy and migrant laborers in the tough time of the pandemic by the way of PM-KISAN and MGNREGA. The decline in the industry and services sectors is forecasted to be 11.4% and 2.8% respectively.

It is mentioned in the survey that "Weak demand and subdued capacity utilization were manifesting into a drag on investment, and the pandemic has further extended the timeline for recovery,"

Even after the lockdown, the majority of the companies are not still working in their full capacities but, consumer durables and FMCG are business. The reason why business is not getting back to its potential is due to less demand and low labor availability.

The survey has further forecasted that new investments will be not becoming in huge amounts in the near future. Factors that will be a key hindrance to the growth opportunities are low demand, rise in the COVID-19 cases, and ongoing quarantine/social distancing being followed.

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