As per the Economic Survey 2020-21, India's real GDP growth is estimated to contract by ______ in financial year 2020-2021.
7.7 percent
Understanding India's Real GDP Growth Estimate for FY 2020-21
The question asks about India's estimated real GDP growth contraction for the financial year 2020-2021, specifically as stated in the Economic Survey 2020-21. The Economic Survey is an annual report presented by the Department of Economic Affairs, Ministry of Finance, Government of India, which reviews the country's economic development during the past year. It also provides forecasts for the coming year.
Economic Survey 2020-21 Findings on GDP
The Economic Survey 2020-21, tabled in Parliament on January 29, 2021, provided an assessment of the Indian economy. Due to the impact of the COVID-19 pandemic and subsequent lockdowns, the survey projected a significant contraction in the country's economic output.
Specifically, the survey estimated that India's real GDP growth would contract by a certain percentage in the financial year 2020-2021. Real GDP growth measures the change in the value of goods and services produced by an economy, adjusted for inflation. A contraction means the economy produced less than it did in the previous year, after accounting for price changes.
Estimated Contraction for Financial Year 2020-2021
According to the Economic Survey 2020-21, the estimated contraction in India's real GDP growth for the financial year 2020-2021 was 7.7 percent.
Let's look at the options provided:
- 11 percent
- 4.5 percent
- 9 percent
- 7.7 percent
Comparing the estimated figure from the Economic Survey with the options, we find that 7.7 percent matches the official projection for the contraction in real GDP growth during FY 2020-21.
Key Economic Indicators from Economic Survey 2020-21
The Economic Survey provides many important economic indicators. Here is a summary of the key GDP estimate:
| Report | Financial Year | Real GDP Growth Estimate |
|---|---|---|
| Economic Survey 2020-21 | 2020-2021 | -7.7 percent (Contraction) |
This negative growth figure indicated the significant economic impact of the pandemic during that period.
Revision Table: India GDP Contraction FY 2020-21
| Topic | Key Information |
|---|---|
| Economic Survey 2020-21 | Annual report reviewing economy; tabled Jan 2021 |
| Real GDP Growth | GDP adjusted for inflation |
| FY 2020-21 Estimate (Survey) | Contraction of 7.7 percent |
Additional Information: Economic Survey and GDP Concepts
Understanding the context helps in grasping the significance of the Economic Survey 2020-21's findings on GDP contraction.
- Economic Survey: This is the flagship annual document of the Ministry of Finance. It reviews the major developments in the Indian economy over the past year and provides an outlook for the next financial year. It is prepared by the Chief Economic Advisor.
- GDP (Gross Domestic Product): GDP is the total monetary value of all the finished goods and services produced within a country's borders in a specific time period, usually a year or a quarter. It is a key indicator of the economic health of a country.
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Real GDP vs Nominal GDP:
- Nominal GDP is measured at current market prices. It reflects changes in both output and prices.
- Real GDP is measured at constant prices (prices from a base year). This removes the effect of inflation or deflation, giving a clearer picture of the actual volume of goods and services produced. Real GDP growth is a better indicator of economic growth as it reflects changes in output, not just prices.
- Financial Year (FY): In India, the financial year runs from April 1st to March 31st of the following calendar year. FY 2020-21 covers the period from April 1, 2020, to March 31, 2021.
The Economic Survey 2020-21's estimate of a 7.7 percent contraction in real GDP growth for FY 2020-21 was a significant figure, highlighting the economic challenges faced by India during the first year of the pandemic.
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