Expressing 'cautious optimism' about the country's economic prospects, a Finance Ministry report on Wednesday said actual GDP growth in 2020-21 would be contingent upon the intensity, spread and duration of the COVID-19 pandemic.
The report, prepared by the Economic Affairs Division of the Finance Ministry, took comfort from an IMF note which projected a growth rate of 1.9 per cent for the current fiscal.
However, it added, "Government is cognizant of the relative severity of lockdown on economic activity in the country and is cautiously optimistic about the signals from Indian benchmark equity indices."
Observing that these are still early days and COVID-19 is yet to abate, the report said "the country's actual GDP growth in FY 2020-21 will be contingent upon the intensity, spread and duration of the COVID-19 pandemic within national territory."
The report further said that downside risks to India's growth emerge from the high possibility of global slowdown deepening and supply chain disruptions getting exacerbated due to prolonged spread of COVID-19 and lockdowns across countries.
India, it added, continues to tackle the health crisis unleashed by the COVID-19 pandemic and the focus has now shifted to revive the economy which has been debilitated by the lockdown.
The government and the RBI are working towards implementing substantial targeted fiscal and monetary measures to support affected sectors of the economy, it said.
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