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Indian economy contracts 7.3% in FY21; experts weigh in

Updated : May 31, 2021 19:53:53 IST

Indian economy contracted 7.3 percent in the financial year 2020-21, the provisional full-year Gross Domestic Product (GDP) data released by the government showed on Monday.

In February, the Centre had estimated real GDP would shrink eight percent in FY21. A CNBC-TV18 poll had estimated the GDP will shrink by 7.5 percent.

Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, in an interview to Latha Venkatesh, said, "We had retained the CSOs estimate of -8 percent GDP and -6.5 percent GVA. So this is marginally better than what we were anticipating."

Sameer Narang, Chief Economist at Bank of Baroda, said the economy has fared a lot better in Q4.

"The economy has fared a lot better in Q4, the beat is across the sectors. So perhaps these numbers also suggest that we don't need to be so pessimistic about how things may pan out once the unlock starts happening."

Anubhuti Sahay, Head of South Asia Economic Research (India) at Standard Chartered Bank, said, "The GDP is in-line with our expectation but the GVA is higher than our estimate of around 2.5 percent. The positive surprise is primarily driven by the construction and the manufacturing sector. They have shown very strong growth in the last quarter versus what we expected."

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