Why in news?
The Indian economy is likely to witness a sharp contraction of 4.5% during Q4FY20 and is expected to recover gradually to post a GDP growth of just 2% in FY21, rating agency ICRA said.
ICRA said it reduced the growth forecast due to the nationwide lockdown imposed in the backdrop of the COVID-19 pandemic.
Concerns have morphed from the impact of imports from China on domestic supply chains into domestic and external demand shock, with social distancing and lockdowns leading to production shutdowns and job losses in some sectors.
Sectors that will be impacted most:
Aviation, hotels, restaurants and tourism, auto dealerships, ceramic tiles, gems and jewellery, retail, shipping, ports and port services, seafood and poultry and microfinance institutions.
Moderately impacted sectors:
Automobiles, auto components, building materials, construction, chemicals, residential real estate, consumer goods, pharmaceuticals, logistics, banking, mining, paper, consulting, ferrous metals, footwear, glass, plastics, power and trading
Low impacted sectors:
Education, dairy products, fertilisers and seeds, FMCG, healthcare, food and food products, insurance, telecom, utilities, sugar, tea, coffee and agricultural produce
- It was created in 1991 by prominent financial institutions and commercial banks in India with a devoted crew of experts for the MSME sector
- Moodys, which is considered as the International credit rating agency holds the major share.