The Q4FY20 GDP number came in better than expected at 3.1% (11 year low) though the downward revision in the previous three quarters takes away some of that relief. The poor data on growth of India's eight infrastructure sectors contracting by a record 38.1% in April led by cement, steel, electricity and coal was partly on expected lines. However this data does not portend well for Q1FY21 unless we see a fast and complete lifting of lockout with safeguards in place.
The fact that Manufacturing sector has grown at 0% for the whole of FY20 vs 5.7% in previous year highlights the extent of issues in that sector and prompts faster and thorough measures to kickstart manufacturing given that the first two months of FY21 are washouts and job creation remains a top priority in the current times. Construction is the other sector needing immediate attention. Agriculture could do well even in FY21 after growing 4% in FY20 and lead the sectoral growth in FY21, contrary to its negative contribution in all earlier years of negative GDP growth. |
