With the lockdown extended for two more weeks, ICRA expects India’s gross domestic product (GDP) to contract by 16-20 per cent in the first quarter of fiscal 2020-21, which implies a 1-2 per cent contraction for the fiscal. However, a healthy Rabi crop and a pickup in government expenditure may provide some cushion to economic activity in the first quarter.
While the graded relaxations announced by the government will permit the resumption of economic activity, the relatively stringent norms in major urban centres will result in the pace of activity remaining constrained, ICRA said in a press release.With the lockdown extended for two more weeks, ICRA expects India's gross domestic product (GDP) to contract by 16-20 per cent in the first quarter of fiscal 2020-21, which implies a 1-2 per cent contraction for the fiscal. However, a healthy Rabi crop and a pickup in government expenditure may provide some cushion to economic activity in the first quarter.#
Given the likelihood of mismatches in labour availability as well as the possibility of supply chain disruptions, the rating agency now expect the drag from sectors like manufacturing, construction, and trade, hotels and transport etc. to linger for a large part of May, with a further delay in the return to normalcy for a large cross-segment of these sectors.
ALCHEMPro News Desk (DS)
marketing@alchempro.com
