Icra sharply revises forecast, expects economy to shrink by 9.5% in FY21

It has earlier estimated a 5% contraction; Q1 may have seen 25% fall

Credit rating agency Icra on Thursday sharply revised its forecast on the contraction in the Indian economy to 9.5 per cent for 2020-21 from its earlier assessment of five per cent. 

It attributed the revision to the climbing Covid-19 infections resulting in a spate of localised lockdowns in some states and cities, arresting the nascent recovery that had set in during May-June 2020.

Icra's projection, in fact, is the sharpest contraction in the gross domestic product (GDP) for FY21 among all estimations so far. At an individual level, former chief statistician Pronab Sen expects a steeper decline in the economy,