Taking cognizance of the adverse impact of the lockdown, CARE Ratings is expecting the real GDP growth at -20 per cent year-on-year (YoY) for Q1 FY21. Gross value added (GVA) is expected to have contracted by nearly 19.9 per cent in Q1 FY21 led by broad based contraction across sectors barring agriculture and public expenditure, the agency said. Low tax collections further weighed on the GDP dragging down the growth further.

According to the report, among the eight sectors under the broad categorisation of GVA, agriculture, forestry and fishing and public administration, defence and other services are expected to register positive growth rates while the others are expected to de-grow in Q1 FY21 mainly on account of pandemic led disruptions.

While agriculture sector is expected to grow 3.5 per cent YoY during the period, all four segments of manufacturing namely, mining and quarrying, manufacturing, electricity, gas, water supply and other utility services and construction are estimated to contract at a double digit rate in Q1 FY21 over the same quarter of FY20.

According to the report, mining and quarrying sector was hampered due to high inventories owing to demand slump and labour shortages, following the reverse migrations. Industrial output growth in the mining sector contracted by 22 per cent in Q1 FY21, depicting the pandemic-led stress on the sector.

Manufacturing sector barring essential services was severely affected as factories were closed owing to the eruption of coronavirus pandemic and subsequent nation-wide lockdown. This weighed on the performance of the private corporate sector during the first quarter of FY21. In Q1 FY21, the IIP growth of the manufacturing sector has contracted by 41 per cent. The combination of these two factors will affect GVA in manufacturing.

Construction sector would be another dragger for the GDP growth as the construction activities came to a near standstill due to nation-wide lockdown as well as muted demand for steel from automobile sector, the report points out.