While the Reserve Bank of India (RBI) has pegged 2020-21 GDP contraction at 7.5 per cent, the World Bank sees the economy shrinking by 9.6 per cent this year. In its Global Economic Prospects report, the World Bank said the informal sector, which accounts for four-fifths of employment, had been subject to severe income losses during the pandemic. "In India, the pandemic hit the economy at a time when growth was already decelerating. The output is estimated to contract by 9.6 per cent in fiscal year 2020-21, reflecting a sharp drop in household spending and private investment,” it said.
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.
"In terms of the sectoral data, our own estimates pencil in a weaker performance of construction, financial, real estate and professional services (FRP), and public administration, defence, and other services (PADOS), and a stronger performance of manufacturing, mining and quarrying, trade, hotels, transport, communication and services related to broadcasting (THTCS), compared to the Advance Estimates for FY2021," said Aditi Nayar, of ratings agency ICRA.
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