Country’s real GDP will shrink by 7.7 per cent in 2020-21, a government release said
India’s per capita gross domestic product (GDP) in 2020-21 dropped 8.7 per cent to Rs 99,155 in 2020-21 from Rs 1,08,620 a year before, according to the First Advance Estimates of National Income, released by the government January 7, 2021.
The country’s real GDP will shrink by 7.7 per cent in 2020-21, lower than the 4.2 per cent growth rate in 2019-20, the statement added.
The per capita private final consumption expenditure, that represents consumer spending, dropped by 10.4 per cent to 55,609 in 2020-21, from 62,087 in 2019-20, a press statement by the Union Ministry of Statistics & Programme Implementation (MoSPI) said.
“Real GDP or GDP at Constant Prices (2011-12) in 2020-21 is likely to attain a level of Rs 134.40 lakh crore, as against the Provisional Estimate of GDP for 2019-20 of Rs 145.66 lakh crore, released on May 31, 2020,” the MoSPI release said.
The country’s gross value added (at 2011-12 prices) was Rs 12,339,175 crore, which is 7.2 per cent lower than last year (Rs 13,301,120 crore). It is the measure of the value of goods and services produced in an area, industry or sector of an economy.
This is understandable as just two economic activities — agriculture, forestry and fishing, and electricity, gas, water supply and other utilities — have recorded a positive growth in this financial year.
The maximum contraction has been recorded in the trade, hotel, transport, communication and services related to broadcasting activity sector (-21.4 per cent), followed by the construction (-12.6 per cent) and mining sectors (-12.4 per cent).
The impact of the novel coronavirus disease (COVID-19) lockdown can be seen in most of the main indicators released in the report, starting with production of cement and crude oil to the aviation sector.
The sale of commercial vehicles plummeted by 56 per cent and private vehicles dropped almost 25 per cent. The telephone subscriber base also shrank by 2.7 per cent.
Aggregate bank deposits have also increased by 10.7 per cent and aggregate bank credits by 5.7 per cent.
The Index of Industrial Production has also gone down: Metallic minerals (-28.4 per cent), manufacturing (-19.7 per cent), mining (13.3 per cent) and electricity (-5.6 per cent). The index shows the growth rates in different industry groups of the economy and the Central Statistical Organisation computes it on a monthly basis.
While the wholesale price index, the price of a representative basket of wholesale goods, of all commodities has gone down by 0.3 per cent, food articles have seen a 4.4 per cent increase.
The Second Advance Estimates of National Income for 2020-21 and quarterly GDP estimate for the quarter October-December, 2020 (Q3 of 2020-21) will be released February 26.
The First Advance Estimates of GDP are based on the benchmark-indicator method. The sector-wise estimates are obtained by extrapolation of indicators like:
- IIP of first seven months of the financial year
- Financial performance of listed companies in the private corporate sector available up to quarter ending September,2020
- First Advance Estimates of crop production
- Accounts of Central and state governments
- Information on indicators like deposits and credits, passenger and freight earnings of Railways, passengers and cargo handled by civil aviation, cargo handled at major sea ports, sales of commercial vehicles, available for the first eight months of the financial year.
Projections for 2020-21 for freight earnings of railways, passengers and cargo handled by civil aviation, cargo handled at major sea ports were also made available by the concerned agencies that were made use of in the compilation of estimates of the respective sectors.
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