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India's GDP likely to contract by 7.9% this fiscal: PHDCCI
27 Oct '20
2 min read
Pic: Shutterstock
India's gross domestic product (GDP) to expected to contract by 7.9 per cent in this fiscal and grow by 7.7 per cent in fiscal 2021-22, according to the PHD Chambers of Commerce and Industry of India (PHDCCI), which recently said the worst is over and the economy is on the verge of a slow recovery. However, unemployment remains a key challenge, it said.
The unemployment rate worsened to 8.3 per cent in August from 7.4 per cent in July, it said in a report.
The trade chamber arrived at the conclusion based on its analysis of 25 high-frequency economic indicators that indicate there has been a pick-up in business normalisation.
It said also that efforts should be made to diversify the portfolio of export products in terms of more countries and also in terms of more products, where India has a core competence.
"Going ahead, India should focus on moving away from imports from China, divert trade towards friendly economies, build domestic capacities and significantly scale-up indigenous production with a thrust to become self-reliant," PHDCCI said.
PHDCCI president Sanjay Aggarwal said on the back of various reforms undertaken by the government during the last six months, economic recovery has become visible in the high-frequency indicators.
The government should prioritise demand creation to attain a positive growth trajectory in the third and fourth quarters of the current fiscal, the chamber suggested.
Demand creation will have a significant effect on the enhanced production sentiments of producers, increased investments and employment creation. Investments in infrastructure will raise demand for commodities like steel, cement and power, which in turn will rejuvenate private investments and create new employment opportunities in the country, said Aggarwal.
The chamber observed that several sectors of the economy will continue to face the after-effects of the pandemic.
The unemployment rate worsened to 8.3 per cent in August from 7.4 per cent in July, it said in a report.
The trade chamber arrived at the conclusion based on its analysis of 25 high-frequency economic indicators that indicate there has been a pick-up in business normalisation.
It said also that efforts should be made to diversify the portfolio of export products in terms of more countries and also in terms of more products, where India has a core competence.
"Going ahead, India should focus on moving away from imports from China, divert trade towards friendly economies, build domestic capacities and significantly scale-up indigenous production with a thrust to become self-reliant," PHDCCI said.
PHDCCI president Sanjay Aggarwal said on the back of various reforms undertaken by the government during the last six months, economic recovery has become visible in the high-frequency indicators.
The government should prioritise demand creation to attain a positive growth trajectory in the third and fourth quarters of the current fiscal, the chamber suggested.
Demand creation will have a significant effect on the enhanced production sentiments of producers, increased investments and employment creation. Investments in infrastructure will raise demand for commodities like steel, cement and power, which in turn will rejuvenate private investments and create new employment opportunities in the country, said Aggarwal.
The chamber observed that several sectors of the economy will continue to face the after-effects of the pandemic.
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