SBI Research's Ecowrap report has said that India’s Gross Domestic Product (GDP) growth may slide to 1.1% in the current financial year (FY21), due to the impact of coronavirus (COVID-19) outbreak on the economy. The economic growth rate during FY20 is estimated to come down to 4.1% from 5% projected by several agencies before the outbreak of deadly virus, which affected more than 20 lakh persons around the world and took lives of over 1.3 lakh people.
In order to check the spread of COVID-19, the government has decided to extend the lockdown to May 3, with some relaxations for specified sectors. According to report, the extension of the lockdown would result in economic loss of Rs 12.1 lakh crore or 6% of the nominal Gross Value Added (GVA). Nominal GDP for FY21 could be lower/closer to 4.2%, as there is a strong possibility of subsidies outstripping tax collections. The report said the lockdown will have a significant impact on several macroeconomic parameters.
Besides, quoting PLFS survey 2017-18, It said, there are 37.3 crore workers engaged as self-employed, regular and casual workers, with share of self employed at 52%, casual worker at 25% and the rest engaged as regular wage earners and others. It added ‘we estimate the income loss per day of these 37.3 crore workers due to lockdown is around Rs 10,000 crore, which translates into a loss of Rs 4.05 lakh crore for the entire lockdown period. For causal labourers, this income loss it at least Rs 1 lakh crore. Thus any fiscal package should at least strive to more than make up for this Rs 4 lakh crore income loss.’
