According to India Ratings and Research, India’s GDP is expected to grow at 5.5 percent in FY21 as against the estimated 5 percent in FY20. The slowdown was due to a combination of factors including an abrupt and significant fall in NBFCs’ and bank lending, reduced income growth and savings of households and rising debt.
Sunil Sinha, economist, India Ratings stated that, a strong policy push coupled with some heavy lifting by the government is required to revive the domestic demand cycle and catapult the economy back into a high growth phase. According to the ratings firm, a continuance of low GDP growth even in FY21 means subdued tax revenue and limited room for stepping up expenditure.