Management Discussion & Analysis

FY 2020-21  



Indian Economy

The year 2020-21 has been an unprecedented one. The Covid-19 pandemic is the severest global health crisis of this century, endangering the whole of humanity and resulting in a substantial weakening of most economies.

The Indian economy witnessed its first ever technical recession in the year FY 2020-21, with gross domestic product (GDP) growth remaining in the negative territory for two consecutive quarters. Lockdowns and travel restrictions imposed significant supply-side constraints on the economy, drastically reducing output and employment.

The Government announced multiple financial measures and structural reforms at different stages of the pandemic towards calibrated fiscal support during lockdown and to boost demand during the unlock phase.


With an aim to speed up the economic normalisation, the Government accelerated the public investment in the key infrastructure sector. The wheels of India’s capex cycle were set in motion with a strong revival in investment-led growth supported by the ‘Atmanirbhar Bharat Mission’ and a massive boost to infrastructure and capital expenditure provided for in the Union Budget 2021.

Apart from economic reforms, the government also implemented various structural reforms in the country covering sectors like Agriculture, MSMEs, Labour, Power and Industry. The agricultural sector remains the bright spot of the Indian economy. However, the surge in commodity prices is expected to create some cost pressures.

With the economic activity gaining momentum post the Covid-19 lockdown, the measures announced by the government and rollout of coronavirus vaccines resulted in an uptick in economic sentiments, but the resurgent Covid-19 second wave has put a dampener on India’s growth trajectory. Hopefully, the country should be in a position to control this second wave of Covid-19 infections and, with progress in vaccination and strict implementation of prevention and detection protocols, the country should be on the growth track for the larger part of FY 2021-22.