The Indian economy will contract by 9 per cent in 2020-21 as the coronavirus infections are yet to peak and the Government is not providing adequate direct fiscal support, ratings agency Crisil said on Thursday.
In May, Crisil had estimated the economy to contract by 5 per cent. The latest projection comes days after official data for the June quarter showed a contraction of 23.9 per cent in the economy.
Crisil said the 9 per cent contraction will be the highest since the 1950s.
The government had announced a Rs 20 lakh crore relief package but the actual new spending was less than 2 per cent of GDP.
“With the pandemic’s peak not yet in sight and the government not providing adequate direct fiscal support, the downside risks to our earlier forecast have materialised,” the agency said.