(Deepshikha Gautam, Intern Journalist) New Delhi: The Indian economy will witness a major decline in the current financial year (FY 2020-21). The recently announced stimulus package by the government to accelerate the decline in economic activity due to the coronavirus epidemic will prove insufficient. This has been said in a report prepared on the basis of interactions with economists. Corona infection cases in India have crossed 77 million. India remains the most infected country in the world after America. Right now, there are no signs of it diminishing. The government has lifted most restrictions on businesses to reduce the economic impact of Corona. Despite this, the Reserve Bank of India (RBI) has released gloomy economic projections. However, even after rising inflation, RBI has not made any change in monetary rates.
Most economists now look more worried about the current fiscal year than they anticipated two months ago. 90 percent of economists say that the recently announced stimulus package by the government will not be enough to accelerate the economy. In order to accelerate the demand, the government had announced an incentive package of about $ 10 billion to 73 thousand crore rupees last week. HDFC Bank Senior Economist Sakshi Gupta says that the measures adopted for consumer spending and capital expenditure are quite innovative. But in terms of growth, they will have very little impact in the current financial year. The Indian economy was projected to decline by 10.4 percent and 5 percent respectively in the third and fourth quarters, after falling by 23.9 percent in the April-June quarter. At the same time, a decline of 9.8 percent was estimated in the current financial year ending 31 March 2021. Which is higher than the RBI’s latest estimate of a 9.5 percent decline.
However, most economists have forecast a 9% growth in the Indian economy in the next financial year. At the same time, 5.7 percent growth is expected in FY 2022-23.
Economists say that it may take at least 1 year for India’s GDP to reach the pro-covid level. IDFC Bank’s Chief Economist Indranil Pan said that job cuts and salary cuts could slow demand for a long. Based on the Economy and Business Momentum Index, the Ph.D. Chamber of Commerce and Industry (PHDCCI) stated that GDP growth could be -7.9 percent in the current financial year. However, 7.7 percent of GDP growth is projected in FY 2022. The PHDCCI report states that 21 out of 25 major economic and business indicators have indicated significant recovery. However, credit distribution remains a major challenge for the industry and service sectors.
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