India’s Gross Domestic Product for the fourth quarter (January to March) grew by 1.6% but the growth rate for the entire financial year of 2020-2021 contracted by 7.3%, government data showed on Monday. This is the worst contraction for a financial year in four decades.

Economists had expressed concerns about this quarter due to a devastating second wave of the coronavirus pandemic. They also said slow recovery in key sectors like manufacturing, financial services, tourism, transport and hospitality will hurt the country’s growth.

Data released by the Centre in February showed that India’s economic growth for the third quarter (October-December) of 2020-’21 was 0.4%. The fourth quarter data showed that the economy continued its positive growth after contracting in two successive quarters.

However, the government revised the second advance estimate for the full financial year 2020-’21 to project a sharper decline of 8%, as compared to the 7.7% contraction it had predicted in the first advance estimate in January.

Moreover, the contractions in the first two quarters of this fiscal also underwent negative revisions. The 23.9% contraction in first quarter (April-June) was revised to -24.4%, while the 7.5% decline in second quarter was revised to -8%.

The fiscal deficit for the financial year 2020-’21 was recorded at 9.3% of the GDP, lower than 9.5% estimated by the finance ministry, PTI reported, citing the Controller General of Accounts data. This translates into Rs 18,21,461 crore.

Fiscal deficit is a shortfall in the central government’s income when compared with its overall expenditure.

The Centre, in the revised estimates in the Budget for 2021-22, had forecast a higher fiscal deficit of 9.5% of the GDP at Rs 18,48,655 crore for the fiscal year due to the rise in expenditure on account of the coronavirus pandemic.

In the financial year 2020-’21, the fiscal deficit was recorded at 4.6% of the GDP.