The economy, though projected to grow 9.6 percent in the next financial year in year-on-year growth term, may grow just 1 percent in real terms to Rs 147.17 lakh crore as against Rs 145.66 lakh crore in 2019-20, at the 2011-12 prices, according to a report by India Ratings.

The size of the economy, as per the National Statistical Office's data, had stood at Rs 145.66 lakh crore in 2019-20, at the 2011-12 prices.

According to the rating agency, the country's gross domestic product (GDP) is expected to contract 7.8 percent to Rs 134.33 lakh crore in 2020-21, but may grow 9.6 percent to Rs 147.17 lakh crore in 2021-22. In the first quarter of the current financial year that was impacted by the lockdown, GDP tanked 23.9 percent year-on-year, while the Index of Industrial Production (IIP) contracted 35.9 percent. But, in a dramatic recovery, GDP contraction was 7.5 percent in the second quarter, while IIP contraction was only 5.9 percent y-o-y.

 "These growth numbers suggest a strong V-shaped recovery, leading to the belief that the economy is out of the woods and on the path of a strong recovery. Even a moderate improvement in 1Q and Q2 of FY22 reflects a decent annualised GDP and IIP growth due to the low base," India Ratings said in the report. It added that due to the low base of 2020-21, the full-year GDP growth of 2021-22 on a y-o-y basis is expected to do fairly well, and our growth projections for 2021-22 is 9.6 percent.

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