Agriculture is projected to grow at 3.4 per cent this financial year and manufacturing to contract 9.4 per cent. Trade, hotel, and transport in the services sector are projected to contract 21.4 per cent.
The projections, following a contraction of nearly 24 per cent in the April-June quarter and 7.5 per cent in the July-September quarter, reflect the slowdown effected by the coronavirus pandemic and the economic impact of months-long nationwide lockdown. The country’s GDP shrank 15.7 per cent in the first half of the year. Against this backdrop, the estimate of a GDP contraction for the full financial year comes as no surprise; it is mostly in line with those by most agencies and differs only in scale (see table).
The First Advance Estimate is important as it would serve as a guideline for Finance Minister Nirmala Sitharaman and her team as they prepare Union Budget 2021, to be presented early next month. The NSO’s advance estimates are seen as a significant gauge for the economy: They have accurately projected the real GDP growth rate in three of the past 12 years.
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