The economic situation warrants enhanced government expenditure; the policy challenge is to minimise the growth fall
India’s growth in the first quarter of 2020-21 at (-) 23.9% showed one of the highest contractions globally. Global growth prospects for 2020 have been projected by a number of multilateral institutions and rating agencies including that for India. The 2020-21 real GDP growth for India is forecast in the range of (-) 5.8% (the Reserve Bank of India’s Survey of Professional Forecasters) to (-) 14.8% (Goldman Sachs). The Organisation for Economic Co-operation and Development (OECD) in its September 2020 Interim Economic Outlook has projected a contraction of (-) 10.2% in FY21 for India.
The annual projections also indicate a strong likelihood of even the nominal GDP growth showing a contraction for 2020-21. The latest data released by the Ministry of Statistics…