News Analysis

CA1: Five Minute Presentation | ECO531: Managerial Economics

Name: Dhawal Raj Section: Q2042 Roll No. B71
Registration: 12009740
Topic: MACRO SITUATION VERY UNCERTAIN, ECONOMY TO SHRINK BY 10 PER CENT IN FY21
Description:

INTRODUCTION:-
India's contemporary macroeconomic scenario is "very uncertain" and the country's GDP could
contract nearer to 10 per cent in the present day fiscal, former chief statistician Pronab Sen stated
on Sunday. The contraction displays the extreme influence of the COVID-19 lockdown, which
halted most economic activities, as properly as the slowdown vogue of the economic system
even pre-COVID-19. Quarterly GDP numbers are nonetheless derived from some company
accounts and corporates have now not fared as badly as the non-corporate sector.
ANALYSIS:-
India's financial system recovered quicker than predicted in the September quarter as a pick-up in
manufacturing. Among predominant monetary activity, manufacturing GDP clock a lower
contraction of 7.5 per cent and held out hopes for in addition enchantment on better consumer
demand. Decelerating GDP growth, sizable reduce in industrial output, fall in tax revenues and a
huge discount in strength demand had been all recorded properly earlier than the impact of the
lockdown was recorded. MSMEs have been hit an awful lot more difficult than the corporations.
So, the headline variety coming out in the countrywide money owed is an overly confident
photograph of the economy. The items and offerings of the present day fiscal generally on
account of subdued demand and liquidity pressures developing slowdown in sales. The pandemic
impacted various sectors, Fiscal, monetary, and economic area measures introduced to date
furnished much-needed guide to the economy, such as businesses, agriculture, and susceptible
households.
CONCLUSION AND RECOMMENDATIONS:-
Without sharing an estimate, India Ratings stated the GDP will proceed to contract in the GDP in
the upcoming months as well. Consumption demand and investments which are imperative to
propel the economy would proceed to be tepid and is unlikely to see a noteworthy improvement
throughout the direction of the year. Government spending would have to do the heavy lifting.
Although there have been some signs of crimson shoots in the economy, with an agricultural
show weak performance. The reforms also come at a time when the Indian financial system
entered a technical recession two consecutive quarters of contraction for the first time in decades.
The authorities needs to center of attention on infrastructure initiatives and ship a strong, pro-
growth message through the budget. The contraction was predicted given the lockdown that
occurred globally. “India is simply experiencing a V-shaped recovery. We need to assume higher
overall performance in the subsequent quarter.