Finance Minister Nirmala Sitharaman on Friday presented the Economic Survey that details the state of the economy, ahead of the government's Budget for the fiscal year beginning April 1, 2021. The Economic Survey 2020-21, authored by a team led by Chief Economic Adviser Krishnamurthy Venkata Subramanian, details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.
The Indian economy can contract by 7.7% in the current financial year ending on March 31 and the growth could be 11% in the next financial year, according to the Economic Survey. The contraction in FY21 is mainly due to Coronavirus (Covid-19) pandemic and the visible damage caused by the subsequent countrywide lockdown to contain it.
The survey unveiled two days before the Union Budget is broadly in line with forecasts by the Reserve Bank of India (RBI) which has said it expected the country's GDP to contract by 7.5% in the year ending March 31. The International Monetary Fund (IMF) recently pegged the contraction in India's economy at 8% in 2020-21. It expects a growth rate of 11.5% in 2021-22 before a decline to 6.8% in 2022-23 and that India will regain the tag of the fastest-growing large economy in the world in both years.
In the quarter ended June 2020, the GDP contracted by 23.9% followed by a milder contraction of 7.5% in the quarter ended September 2020. "India was the only country to announce a slew of structural reforms to expand supply in the medium to long term and avoid long-term damage to productive capacities," said the survey. "The upturn in the economy while avoiding the second wave of infections makes India a sui generis case in strategic policymaking amidst a once-in-a-century pandemic," it added.
(With ANI inputs)