India's economic growth may fall sharply to 2.6% in 2020-21 amid coronavirus COVID-19 lockdown: SBI report

New Delhi: The country's economic growth is likely to fall sharply to 2.6 per cent in 2020-21 due to lockdown amid the coronavirus pandemic, a research report said on Thursday. According to a report by SBI Research's Ecowrap, GDP growth for 2019-20 could also see a downward revision from 5 per cent to 4.5 per cent, with growth in the fourth quarter of the current financial year at 2.5 per cent.

"What would impact on India's GDP because of such a lockdown?... We thus peg our 2020-21 GDP estimate at 2.6 per cent, with a clear downward bias, with first quarter of the next fiscal GDP numbers witnessing a contraction," the report said.

Prime Minister Narendra Modi had announced a complete lockdown across the country for 21 days from Wednesday, asserting that social distancing is the only way out for the country in its decisive battle against coronavirus.

The death toll due to COVID-19, the disease caused by coronavirus, in India rose to 16 on Thursday and the number of positive cases increased to 694, according to the health ministry.

"2019-20 fiscal GDP estimates could also see a downward revision from 5 per cent? to 4.5 per cent with fourth quarter of current GDP growth at 2.5 per cent," it added.

According to the report, the total cost of lockdown is at least Rs 8.03 lakh crore in nominal terms, an income loss of Rs 1.77 lakh crore and a loss in capital income of Rs 1.69 lakh crore.

Stating that the income loss will be the highest in agriculture, transport, hotels, trade and education, the report said, "However, the economy could recover potentially faster the quickly the stimulus programme is in place.