Chief Economic Advisor KV Subramanian on Friday, 27 November said that GDP estimates show “upside potential” than what was anticipated, though he urged for caution in the coming months, reported news agency ANI.
India’s Gross Domestic Product (GDP) for the second quarter from July to September of the financial year 2020-21 contracted 7.5 percent.
With two straight quarters of GDP contraction, India has fallen into a technical recession — the first since India began releasing quarterly estimates of GDP in FY98.
Subramanian further stated that there is uncertainty in the economic outlook due to the COVID-19 pandemic.
“I would urge caution especially given winter months,” ANI quoted Subramanian as saying.
Subramanian further stated that the Q1 contraction was majorly due to COVID-19 lockdown. “We should be cautiously optimistic and the caution is warranted because the economic impact is primarily due to the pandemic,” said Subramanian.
Speaking on a growth estimate for the entire financial year, the chief economic advisor said that after seeing Q1 and Q2, there is a possibility of positive recovery, reported PTI.
“GDP at Constant (2011-12) Prices in Q2 of 2020-21 is estimated at Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in Q2 of 2019-20, showing a contraction of 7.5 percent as compared to 4.4 percent growth in Q2 2019-20. Quarterly GVA at Basic Prices at Constant (2011-12) Prices for Q2 of 2020-21 is estimated at Rs 30.49 lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20, showing a contraction of 7 percent”Ministry of Statistics and Programme Implementation said in a statement
Subramanian also said that there is a V-shaped growth pattern in all major sectors today.
“Consumer durables, capital and infrastructure look very encouraging. Food Inflation is expected to soften in Q3,” Subramanian was quoted saying by ANI.
He also said that food inflation is expected to soften in the third quarter and it is something which has to be tracked closely, reported PTI.
(With inputs from ANI and PTI)
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