Q1 growth fell on decline in all sectors except agri: Govt informs Parliament

New Delhi: The government on Wednesday informed Parliament that overall gross domestic product (GDP) at constant prices did not decline during any of the four quarters of 2019-20. Decline in the first quarter of 2020-21 was owing to fall in the growth rates in almost all the broad sectors, except Agriculture, forestry and fishing sector.

“The sectors namely, Mining & Quarrying; Manufacturing; Constructions; and Trade, Hotels Transports, Communications and Services related to Broadcasting witnessed sharp decline during the first quarter of 2020-21,” said minister of state (independent charge) of the ministry of statistics and programme implementation Rao Inderjit Singh in a written reply to the Lok Sabha.

He was replying to a question on whether the government has assessed the impact of demonetisation and Covid-19 on GDP growth.


GDO contracted 23.9% in the first quarter of FY21, against 5.2% growth in Q1 of FY20 due to various factors, including Covid-19, he said.

Project cost overruns

In a separate reply, Singh said that as on July 1, 2020 there are 1,683 on-going Central Sector Infrastructure Projects costing Rs 150 crore with total cost overrun of Rs 4.11 lakh crore.

“As on July 1, 2020 there are 1,683 on-going Central Sector Infrastructure Projects costing Rs 150 crore and above with anticipated completion cost of Rs 24.77 lakh crore and original cost of Rs 20.65 lakh crore with total cost overrun of Rs 4.11 lakh crore in figures and 19.94 in percentage,” Singh said.

He also said that as on May 1, 2020, 403 projects out of 1,682 projects were facing cost overruns with respect to original project implementation cost.

The main reasons for increase in cost of the projects are under-estimation of original cost, changes in rates of foreign exchange and statutory duties, high cost of environmental safeguards and rehabilitation measures, spiraling land acquisition costs, shortage of skilled manpower/ labour, changes in project scope, monopolistic pricing by vendors of equipment services, general price rise and time overruns.

“Delay in land acquisition and forest clearance has been one of the reasons for time overrun leading to cost overrun as reported by implementing agencies,” he said.

The number of infrastructure projects, above Rs 150 crore undertaken by the government during each of the last three years and the current year are 1,315 (March 2018); 1,405 (March 2019); 1,686 (March 2020) and 1,683 (June 2020) respectively.