Investment activity hits historic low in FY21 amid Covid-19 pandemic

This is because of the lockdown in Q1; sharp pick-up in Q4 may not sustain, say experts

Investment activity revived to a seven-quarter high and demand recovered to a five-quarter high in the fourth quarter of financial year 2020-21 (Q4FY21), but this may not sustain because of the impact of the second wave of Covid-19 on rural demand and corporate spending, feel economists.

The better-than-expected economic growth in Q4 was largely led by a spike in government spending and a double-digit growth in investment activity, owing to a low base.

However, for the whole of FY21, growth in investment and consumption touched a historic low as the country grappled with the impact of the nationwide lockdown in Q1.

Devendra Kumar