GDP contracts 7.three per cent in Covid-ravaged 2020-21 fiscal

New Delhi, May 31

India’s Gross Domestic Product contracted 7.3 per cent in 2020-21, government data showed on Monday—as the economy continues to reel under the after-effects of a year ravaged by the deadly Covid-19 pandemic.

This was against 4 per cent growth recorded in 2019-20, the data showed.

The GDP grew 1.6 per cent in the fourth quarter—January-March—of 2020-21, the data showed.

Meanwhile, retail inflation for industrial workers marginally eased to 5.14 per cent in April compared to 5.64 per cent in March, mainly due to lower prices of certain food items.

  “Year-on-year inflation for the month (April) stood at 5.14 per cent compared to 5.64 per cent for the previous month and 5.45 per cent during the corresponding month of the previous year,” the labour ministry said in a statement on Monday.

According to the statement, food inflation stood at 4.78 per cent in April against 5.36 per cent in the previous month. The same was at 6.56 per cent in April 2020.

The All-India CPI-IW (Consumer Price Index-Industrial Workers) for April 2021 increased by 0.5 points and stood at 120.1 points from 119.6 points in March.

In terms of one-month percentage change, it rose by 0.42 per cent in April compared to March this year while the increase was 0.92 per cent as against the same period a year ago.

The maximum upward pressure in current index came from Food & Beverages group contributing 0.43 percentage points to the total change.

At an item level, Arhar Dal, Masur Dal, Fish Fresh, Goat Meat, Poultry Chicken, Eggs-Hen, Edible Oils, Apple, Banana, Grapes, Leechi, Orange, Papaya, Tea Leaf, Tea Hot-drink, Barber/Beautician Charges, Flowers/Flower Garlands, Doctor’s Fee, Rail Fare, Servicing Charges of Motor Cycle and Cable Charges were among those that contributed to the rise in the index.

However, the increase was largely checked by items such as Rice, Onion, Bitter Gourd, Drum Stick, Lady Finger, Parval, Cooking Gas and Petrol.

At a centre level, Jabalpur recorded maximum rise of 3.6 points followed by Raipur and Bhavnagar with an increase of 3.2 and 3.1 points, respectively.

Six centres recorded an increase between 2 to 2.9 points while the rise was between 1 to 1.9 points at 11 centres. At 49 centres, the increase was in the range of 0 to 0.9 points.

Coonoor registered the maximum decrease of 2.3 points while three centres witnessed a decline between 1 to 1.9 points, and 15 centres saw a decrease between 0 to 0.9 points.

Labour Minister Santosh Gangwar said the rise in the index will result into increased wages of working class population by way of an increase in dearness allowance payable to them.

“Decline in inflation during April 2021 is a sign of respite for consumers that is mainly due to lower retail prices of vegetables,” he noted.

CPI-IW is the single most important price statistics that have financial implications.

It is primarily used to regulate the dearness allowance of government employees and workers in industrial sectors. It is also used in the fixation and revision of minimum wages in scheduled employments besides measuring the inflation in retail prices.

Director-General Labour Bureau DPS Negi said the rise in the index during April 2021 is in line with all other price indices compiled and released and the decline in inflation during the month has been observed across all retail price indices released by other government agencies.

The Labour Bureau, an attached office of the Ministry of Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country.

The data is released on the last working day of the succeeding month.

World economy limps back

The global economy could grow by “nearly 6 per cent” this year, the Organization for Economic Co-operation and Development (OECD) said on Monday, while warning that recovery from the Covid-19 pandemic-related losses will be “very uneven”.

Growth will be driven by the world’s three main economic powers, with China’s gross domestic product (GDP) set to expand by more than 8 per cent, dpa news agency quoted the Paris-based OECD as saying in its 2021 Economic Outlook.

The US should be close behind, registering nearly 7 per cent GDP growth, with the European Union clocking a higher-than-usual 4.25 per cent.

But while this year’s projected rebound would amount to “an impressive surge after the 3.5 per-cent contraction in 2020” it is unlikely to return living standards “to the level expected before the pandemic” by the end of next year, the OECD said.

It also noted that pandemic-related curbs have made it more difficult to estimate GDP and “may have reduced the comparability of economic outcomes across countries”.

The OECD said it while it was “very encouraging” that some governments provided “unprecedented” support for businesses forced to close by pandemic restrictions, it warned that most countries do not have the means for such spending, meaning “headwinds” remain for global growth.

Developing countries “have less policy capacity to support activity than advanced economies”, the OECD said, meaning that weighed against pre-pandemic expectations, “output shortfall” in developing economies could be “more than twice that in the median advanced economy” by the end of 2022.

A “disturbing” scarcity of coronavirus vaccines in poorer countries could sharpen the divide, the Organization added.


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