Indian Economy

Indian Economy

The Indian Economy, after subdued growth in 2019, had begun to regain momentum January 2020 onwards, only to be stalled by the once-in-a century black swan COVID-19 outbreak.

NSO has estimated a contraction of real GDP by 7.7 per cent in 2020-21 as compared to a growth of 4.2 per cent in 2019-20.

State of Indian Economy

  • Gross Domestic Product (GDP):  The survey estimates nominal GDP growth of 15.4% and real GDP growth of 11% in 2021-22.  In 2020-21, GDP declined by 23.9% in the first quarter and by 7.5% in the second quarter.  Overall, GDP is expected to decline by 7.7% in 2020-21 as compared to the growth of 4.2% in 2019-20.
  • Inflation: The Consumer Price Index (CPI) based inflation was 6.6% in 2020-21 (April-December).  The inflation mainly due to food inflation which increased from 6.7% in 2019-20 to 9.1% in 2020-21 (April-December). 
  • Current account surplus: In the first half of 2020-21, the current account surplus was 3.1% of GDP.  The survey expects current account surplus to be at least 2% of the GDP by end of 2020-21.  If achieved, this will break a 17-year trend of current account deficits.  The surplus is due to reduction in merchandise imports and lower expense on travel services, which led to higher decline in current payments (30.8%) as compared to the decline in current receipts (15.1%).
  • Fiscal deficit: As of November 2020, the fiscal deficit was 135.1% of budget estimate.  In comparison, between April to November 2019, fiscal deficit was 114.8% of the budget estimate.  The survey noted that the country was fiscally strained due to the disruptions caused by the COVID-19 pandemic. 

Current Year – FY 2021-22

Financial Year 2020-21

Economic Concepts related to Economy of India

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