Ind-Ra cuts India's FY21 GDP growth further to 1.9 pc, lowest in 29 yrs
According to Ind-Ra, Indian economy had registered a GDP growth of 1.1 per cent in financial year 1991-92.
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.
Ind-Ra, noted that its growth projection is based on the assumption that the partial lockdown will continue till mid-May 2020.
According to Ind-Ra, "GDP may come back to the fourth quarter of 2019-20 fiscal level only by the third quarter (October-December) of current 2020-21 fiscal anticipating resumption of normal economic activities during second quarter (July-September) of 2020-21 and festive demand during third quarter of current fiscal (October-December)," it said.
The rating agency, however added that if the lockdown continues beyond mid-May 2020, and a gradual recovery takes root only from June-end, GDP growth may slip further to negative 2.1 per cent, lowest in the last 41 years, and only the sixth instance of contraction since fiscal year 1957-58.
According to Ind-Ra, India's GDP in 1957-58 was negative 0.4 per cent, in 1965-66 it was negative 2.6 per cent, in 1966-67 it was negative 0.1 per cent, in 1972-73 it was negative 0.6 per cent, and in 1979-80 it was negative 5.2 per cent.
For 2020-21, Ind-Ra expects retail inflation at 3.6 per cent.
The rating agency said on the fiscal front, the dip in tax/non tax revenue due to the lockdown/growth slowdown coupled with the need to provide fiscal stimulus will destabilise the fiscal arithmetic of both union and state governments."Even without any significant fiscal stimulus Ind-Ra expects the fiscal deficit of the union government to escalate to 4.4 per cent per cent of GDP in 2020-21 fiscal (FY21 Budget Estimate: 3.5 per cent of GDP) and a stimulus package of Rs 4 trillion would push it to 6.0 per cent of GDP," it said. BKS DRRDRR
(This story has not been edited by Business Insider and is auto-generated from a syndicated feed we subscribe to.)
- An American tourist in Seoul said he sprayed graffiti in 155 places to raise awareness about teeth grinding
- X could lose $75 million in ad revenue after a litany of controversies from Elon Musk, including his endorsement of antisemitic comments, report says
- The S&P 500 will trade near its all-time high before a recession drags it down again in a topsy-turvy 2024, Société Générale says
- 10 Best honeymoon places near Delhi
- Samsung launches new smartphone with 50 MP camera in India
- Unveiling the sweet side of corn: 7 mouthwatering recipes
- Delhi's top must-do winter activities this season
- Tata Technologies IPO allotment – How to check allotment, GMP, listing date and more