GDP Shrinks Q4FY21 – UPSC Prelims

  • India’s Gross Domestic Product (GDP) contracted by 7.3% in 2020-21, as per provisional National Income estimates released by the National Statistical Office.
  • This is the first full-year contraction in the Indian economy in the last four decades since 1979-80, when GDP had shrunk by 5.2 per cent.
  • GDP growth in 2019-20, prior to the COVID-19 pandemic, was 4%.
  • The Gross Value Added (GVA) shrank 6.2% in 2020-21, compared to a 4.1% rise in 2019-20.
  • Only two sectors recorded positive GVA growth – agriculture, forestry and fishing, which rose 3.6%, and electricity, gas, water supply and other utility services (up 1.9%).
Fiscal Deficit:
  • Higher tax collections helped arrest fiscal deficit (excess of government expenditure over revenue) at 9.3 per cent of the GDP in FY21 as against 9.5 per cent projected previously.
  • Before the outbreak of the pandemic, the fiscal deficit had soared to a seven-year high of 4.6 per cent of GDP in 2019-20 mainly due to poor revenue growth.
  • The government has pegged the fiscal deficit during the current 2021-22 fiscal at 6.8 per cent of GDP.

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