India's GDP growth numbers better than anticipated: FICCI

03 Jun '21

2 min read

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India’s gross domestic product (GDP) growth numbers, both for the fourth quarter and for the full fiscal 2020-21, have been a little better than anticipated, reflecting recovery gaining traction during the January-March quarter, according to Federation of Indian Chambers of Commerce and Industry (FICCI) president Uday Shankar, who said the pickup in manufacturing, electricity and construction sectors is particularly telling.

"However, we must note that the sharp economic turnaround that India was witnessing earlier this year has been suddenly interrupted due to the devastating second wave of the COVID-19. FICCI is particularly concerned about the spread of the second wave to the rural areas and smaller towns. Almost all the lead recovery indicators have been undermined once again over the past few weeks," he said in a press release.

"Moreover, even though there was a limited impact on the supply side this year, it is the demand which has taken a greater hit. In fact, our latest Business Confidence Survey released yesterday [May 31] has once again revealed weak demand arising as a major challenge for businesses. Unlike last time, when households fell back on their savings and helped in quick economic recovery with pent-up demand, this time, savings are depleted as health expenditure has been quite high,” he said.

“Also, there has been permanent impairment to income for many. We feel that there is an urgent need for boosting demand through direct income support measures. Focus on urban poor, security cover for MSMEs [micro, small and medium enterprises] and other high contact-based services will be critical," added Shankar.

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