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India May Have Lost Rs 20 Lakh Crore During April-September: Report
Although there have been reports of steady economic recovery in the country, the expected economic output the country may have lost over the past six months is a matter of concern.
India | 6 Nov 2020 1:36 PM GMT
Credits: Wikimedia
According to UBS Securities India, the Indian economy might have suffered a staggering ₹20 lakh crore loss or 10.5 per cent of Gross Domestic Product (GDP) between April and September 2020.
Although there have been reports of steady economic recovery in the country, the expected economic output the country may have lost over the past six months is a matter of concern.
According to The New Indian Express report, UBS has also estimated slow potential growth to 5.75 - 6.25 per cent due to the longer-than-expected disruption caused by the coronavirus.
The government will announce GDP data for the second quarter on November 27. Even though economic activity appears to have returned close to pre-COVID levels, analysts expect normalisation in economic activity to proceed at a gradual pace.
"There are also signs of pent-up demand as reflected in auto sales, but many believe this could taper off post-festive season considering there is still much uncertainty and households' face stretched balance sheets amid stagnant/reduced income levels and might prefer to increase their buffer of precautionary savings. Government's fiscal response remains conservative. The revival in investment intentions and upcoming union budget focus on government spending momentum will be key to determining India's economic growth outlook for next year," Tanvee Gupta Jain, Economist, UBS Securities told the media.
The firm also estimated India's public debt-to-GDP to rise to 90 per cent by Fiscal Year 2022 from 72 per cent in Fiscal Year 2020. If attained, this will be the third-highest emerging market after Argentina and Brazil.
Jaid added the renewed focus on productivity-enhancing reforms and investments could help reduce the risks erupting in India's medium-term growth outlook.
Besides, Foreign Direct Investment (FDI) inflows to India rose to a record $56 billion in FY20 and the government estimates FDI pipeline to increase to $165 billion.
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