The gross domestic product (GDP) growth will bounce back to 10.4 per cent year on year (yoy) in the next fiscal year, primarily driven by the base effect, according to estimates by rating agency India Ratings and Research (Ind-Ra). The estimate also shows that after recording negative growth during for several months in the current financial year, the GDP growth will turn positive at 0.3 per cent year-on-year in the fourth and last quarter of the current fiscal.
Although the recovery in the next fiscal or 2021-22, on a year-on-year basis will be V-shaped, the size of the GDP will barely surpass the level achieved in the financial year 2019-20 and will be 10.6 per cent lower than the trend value. The impact of the COVID-19 pandemic and induced lockdown on the economy, although slowly reducing, will continue to delay the normalisation of activities, especially in the contact-intensive sectors. Till mass vaccination or herd immunity is achieved, the pace of economic growth in such sectors will be slow.