SBI Ecowrap Report: The Indian economy has come out of recession and it grew at a rate of 0.4 per cent in the third quarter of October-December 2020 in the current financial year 2020-21. Earlier, there was a decline of 24.4 per cent in the first quarter of the current financial and 7.3 per cent in the second quarter. With growth in the third quarter, India became one of the countries in which the economy improved in the fourth quarter of 2020 (October-December 2020) last year, while in some European countries, the decline in the July-September 2020 quarter exceeded the October-December 2020 quarter. Stayed in Although the cases of corona infection are increasing once again from the last few, lockdowns are being imposed at the local level. This may affect the gains achieved in the current fiscal quarter. According to the SBI Ecowrap report, the fourth quarter may fall in January-March 2021.
According to the SBI report, if we talk about the entire financial year, GDP may fall at 8 percent and GVA may fall at 6.5 percent. However, for the next financial year 2021-22, real GDP growth could be 11 percent and nominal GDP 15 percent. According to the SBI report, except agriculture, only electricity, gas, water supply and other utility services are expected to grow in FY21.
These documents are necessary to get Corona vaccine, registration will be done in three ways.
Record gap between annual GDP and GVA
Typically, there is a 70 bps (0.7 per cent) difference between annual GDP and GVA, but for the first time in FY21 this difference can be 148 bps (1.48 per cent). The biggest reason for this is the steep fall in net direct tax in the first quarter of the current financial year. The difference between annual GDP and GVA in the first quarter was 200 bps (2 per cent). The GVA is expected to remain at 2.7 per cent in the fourth quarter and is a better indicator to measure the economic recovery under current conditions as there are a lot of fluctuations in tax numbers.
Nominal loss may be less than the assessment of NSO
Talking about the nominal loss, there was a loss of Rs 13.2 crore in the first half of the current financial year, which turned into gains of 2.7 lakh crore in the third quarter. Now in the fourth quarter it is estimated that there may be gains of 2.8 lakh crores. Talking about the entire financial year, there could be a nominal loss of 7.6 lakh crore. However, SBI EcoRap believes that this nominal loss may be lower than the estimate of NSO.
Estimates of Sectorwise Growth in FY21
- Agriculture and allied activities in the third quarter grew at a rate of 3.9 percent compared to 3.4 percent in the third quarter of FY20. It is expected to grow at a rate of 3 per cent in FY21 as compared to 4.3 per cent in the last financial year.
- In the third quarter, the industry sector grew at 2.7 per cent, driven by 7.3 per cent growth in electricity, gas, water supply and other utility services and 6.2 per cent growth in construction. Mining and quarrying are still in negative growth. In FY21, it is expected to fall by 8.2 per cent as compared to a decline of 1.2 per cent in the last financial year. Except for agriculture, only electricity, gas, water supply and other utility services are expected to grow in FY21.
- Services GDP growth was negative in the third quarter but there was recovery. There was a (-1.0) drop in the third quarter compared to (-) 21.4 percent in the first quarter and (-) 11.3 percent in the second quarter. This recovery in services GDP growth was due to 6.6% growth in financial, real estate and professional services. In FY21, the service sector may shrink at a rate of 8.1 per cent as compared to 7.2 per cent growth in the previous financial year.