GDP contracted 10.7% in Q2
India’s GDP likely contracted 10.7% in the second quarter, with a further recovery likely in the third quarter.
- After witnessing a decline of 23.9% in real GDP in Q1 FY21, expected Q2 GDP growth at -10.7% (earlier: -12.5%) with positive bias, based on ‘Now casting’ model with 41 high frequency indicators, associated with industry activity, service activity, and global economy.
- The extent of recovery in subsequent quarters can only be gauged after the actual Q2 numbers are published.
- The monthly index has touched an all-time high of 62.1 (reflecting high growth) in November, from 59.3 in October.
GST collections to rise
- Based on this, SBI projected that the index of industrial production (IIP) and manufacturing sector output may grow by 2-3% in October 2020 and 3.5-4.5% in November.
- Goods and Services Tax collections were expected to improve further in November.
- November GST collections at a 10-month high of ₹1.08 lakh crore as compared to ₹1.05 lakh crore in October.
- The excellent improvement in GST is mainly due to traction in economic activities and services in festive month of November.