Economic Survey 2021 projects 11% growth next fiscal year

New Delhi: India's GDP is estimated to contract by 7.7 per cent during the current fiscal, said the Economic Survey 2020-21 on Friday.

The Economic Survey which was tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha assumed the contraction at (-) 7.7 per cent in its debt simulations for worst-case debt analysis.

The real growth rate for FY22 was assumed at 11.5 per cent based on IMF estimates, the survey revealed.

While the survey forecast a "V-shaped" economic recovery, it also cautioned that it would take at least two years to revert to pre-pandemic gross domestic levels.

"With the economy's returning to normalcy brought closer by the initiation of a mega vaccination drive, hopes of a robust recovery in services sector, consumption, and investment have been rekindled," the survey said.

The document prepared by the Finance Ministry's Chief Economic Adviser Krishnamurthy V. Subramanian said general government debt for FY20 is taken as 73.8 per cent of the GDP.

"The primary deficit for FY21 is assumed to be 6.8 per cent of GDP... Primary deficit for FY22 is assumed to be 2.5 per cent of GDP.

"The declining trajectory of primary deficit is assumed to reach 1.5 per cent of GDP by FY24, and it is assumed to stay at 1.5 per cent thereafter," it added.

Besides, the survey cited that nominal interest rate is assumed to be 6 per cent.