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As India reported a 7.3 per cent contraction in its GDP for FY21, Chief Economic Adviser (CEA) K.V. Subramanian has said that the overall impact of the second wave of Covid-19 is unlikely to be significant, although there is uncertainty over possible double-digit growth in the current financial year.

Addressing the media after the release of the GDP numbers, the CEA also said that giving any actual numbers for economic forecast would not be prudent as the pandemic is evolving and the economic trajectory of the country totally depends on the severity of the pandemic.

"Whether or not that will be double digit or single digit there is uncertainty because scientists are also talking of a possibility of a third wave"

"Economic activity is inexplicably linked to the path of the pandemic," Subramanian said.

He noted that "the speed and the scale of the second wave does lend caution" towards the economic recovery.

The CEA was of the view that with the country still battling with the pandemic continued monetary and fiscal policy support will be import going ahead.

India's GDP growth rate plunged (-) 7.3 per cent in 2020-21. Though not comparable, the GDP had grown by 4 per cent in 2019-20.

The pandemic-triggered national lockdown (from late March 2020) during Q1FY21 had a massive impact on the economy, which suffered a GDP contraction of 24.4 per cent. It was only on June 1, 2020, that the partial unlock measures were implemented.

The data furnished by the National Statistical Office (NSO) showed real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in year 2020-21 attained a level of Rs 135.13 lakh crore, as against the 'First Revised Estimate' of GDP for the year 2019-20 of Rs 145.69 lakh crore.

On the other hand, in terms of sequential basis, India's economy grew during the fourth quarter, which ended on March 31, 2021, by 1.6 per cent.