Recently the National Statistics Office (NSO) has released Provisional Estimates of National Income for the financial year 2020-21. GDP at Current Prices in the year 2020-21 is estimated to attain a level of ₹197.46 lakh crore, as against the First Revised Estimates of ₹203.51 lakh crore in 2019-20, showing a change of -3.0 percent as compared to 7.8 percent in 2019-20.
Key points of Provisional Estimates Of National Income
Government of Statistics and Program Implementation Ministry (Ministry of Statistics and Programme Implementation- MoSPI the National Statistics Office (NSO) under) recently fiscal Provisional estimates of national income for 2020-21 (Provisional Estimates of National Income).
According to data released by the National Statistics Office (NSO), India’s GDP growth rate has been ‘-7.3 per cent’ in FY 2021-21. This decline in GDP growth is due to the Kovid-19 epidemic.
It is noteworthy that the Indian economy has performed the worst in four decades due to the Kovid-19 epidemic.
According to the data, GDP grew at a rate of 1.6 per cent in the fourth quarter (January-March 2021) of FY 2020-21. This indicates that the country’s economy was on the path of recovery before the second wave of the Kovid-19 pandemic.
The GDP growth rate was 0.5 per cent in the third quarter of FY 2020-21 and the growth rate was ‘-7.5%’ in the second quarter.
At the same time, there was a historic decline in GDP in the first quarter of FY 2020-21 and it was -23.9%.
It is worth noting that in the fiscal year 2019-20, the GDP growth rate of the country was 4 percent.
What is GDP ?
It is the gross monetary or market value (GDP) of the total monetary or market value of all goods and services produced within a specified time frame within a country’s boundary.
It is a comprehensive measurement of a country’s domestic production and it shows the health of a country’s economy.
It is usually calculated yearly, but in India it is judged every three months i.e. quarterly. A few years ago, separate services like education, health, banking and computer services were also added to it.
There are two types of GDP – nominal and real.
Nominal GDP is the sum of all figures at current prices, but the effect of inflation in real GDP is also adjusted, that is, if the price of a commodity has risen by Rs 10 and inflation is 4%, then its real value will increase. Only 6 percent will be considered. The figures released every quarter in India are of real GDP.
The National Statistical Office- NSO is under the
National Statistical Office- NSO, Ministry of Statistics and Program Implementation, Ministry of Statistics and Program Implementation- MoSPI, Government of India.
It was created in the year 2019 by merging the National Sample Survey Office (NSSO) with the Central Statistics Office (CSO).
The summary of Provisional Estimates Of National Income
GDP growth has contracted by 7.3% in FY 2020-21 which is the maximum contraction (negative growth) in the post-independence history of India. The first two-quarters of FY 2020-21 saw negative (real GDP) growth of -24.4% and -7.4% respectively which led to the declaration of a “Technical Recession” in the Indian economy. (the technical definition of a recession is at least two consecutive quarters of negative real GDP growth).
The growth figure of -7.3% is also provisional which may get revised later.
India has faced negative growth in real GDP four times previously (after Independence) in 1957-58 (-1.2%) [Drought], 1965-66 (-3.66%) [drought/war], 1972-73 (-0.32%) [drought/Oil crisis] and 1979-80 (-5.2%) [Drought/political instability].
Earlier most of the agencies had projected -7.7% growth for 2020-21 and 10.5% growth for 2021-22. So, the 10.5% projected growth (which could be the highest ever growth) for 2021-22 was basically because of the BASE effect. BUT now since the contraction in 2020-21 is less (-7.3%) than expected (-7.7%), SO the impact of base effect on 2021-22 will be less and it has to be revised and now the growth for 2021-22 can be less than 10.5%. The other reason for less than 10.5% growth in 2021-22 will be the second covid-19 wave.
Only two sectors have experienced positive growth in 2020-21 one is agriculture, forestry, and fishing and the other is electricity, gas, water supply, and other services.