India's economy to likely contract by 4.5pc in Q4 FY2020: ICRA

ICRA has sharply cut its forecast for Indian GDP growth in FY 2021, post the Covid-19 outbreak.

"Amid uncertainty as to when the situation will normalize, we expect a sharp downturn in various indicators of the manufacturing and services sectors from March 2020 onwards," said Shamsher Dewan, Vice President and Sector Head, Corporate Ratings, ICRA.

"This primarily includes the discretionary activities like travel, tourism and hospitality; labour intensive sectors like construction, transport and manufacturing of non-essential items; exports; and supporting sectors like electricity."

According to Dewan, the silver lining amid the grim scenario will be the expected healthy outlook for the rabi crop which would provide some support through improved rural demand.

"Higher government spending would also cushion the extent of the slowdown to an extent," he said.

The Covid-19 outbreak which started in China in December 2019 has morphed into a global pandemic, affecting 203 countries, over one million people and increasing rapidly - European countries, North America and Asia being severely impacted.