Indian economy records worst growth in over four decades in FY21

For the first time in over four decades, the Indian economy recorded its worst growth, falling 7.3 per cent in 2020-21. However, the fourth quarter of the fiscal showed a meagre rise of 1.6 per cent. The contraction mostly linked to the pandemic induced lockdown and restriction.

According to the National Statistical Office, the GDP growth had seen contractions in the first and second quarter of FY21, before turning positive and seeing a growth of 0.5% in Q3.

The figures reflected the delicate state of the Indian economy that had been reeling under the impact of financial reforms like demonetisation even before the COVID began damaging the economy.

"Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2020-21 is now estimated to attain a level of ₹ 135.13 lakh crore, as against the First Revised Estimate of GDP for the year 2019-20 of ₹ 145.69 lakh crore, released on 29th January 2021. The growth in GDP during 2020-21 is estimated at -7.3 per cent as compared to 4.0 per cent in 2019-20," the Ministry of Statistics and Programme Implementation said.

In 2019-20, the GDP had recorded an 11-year low of 4% growth. This shrunk in the first half of 2021-22 by 24.38 per cent owing to the COVID-19 pandemic, which later improved to a 7.5 per cent fall in July- September. In the October-December quarter, the country witnessed a growth of 0.4 per cent.

While the RBI had projected a 7.5 per cent contraction for FY21, the CSO had predicted 8 per cent. However, analysts were more optimistic and had expected a bounce back.