FDI in Information & Broadcasting sector dips to $823 mn in FY2020

India’s real GDP is expected to record a growth of 11 per cent in 2021-22 and nominal GDP by 15.4 per cent-the highest since independence. The V-shaped economic recovery is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector and prospects for robust growth in consumption and investment. This was stated in the Economic Survey 2020-21, presented by Union Minister for Finance & Corporate Affairs Nirmala Sitharaman in Parliament on January 29, 2021.

The Economic Survey further stated that India’s GDP is estimated to contract by 7.7 per cent in FY2020-21, composed of a sharp 15.7 per cent decline in first half and a modest 0.1 per cent fall in the second half. Sector-wise, agriculture has remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and have been recovering steadily. Government consumption and net exports have cushioned the growth from diving further down.

As anticipated, while the lockdown resulted in a 23.9 per cent contraction in GDP in Q1, the recovery has been a V-shaped one as seen in the 7.5 per cent decline in Q2 and the recovery across all key economic indicators. This V-shaped economic recovery is due to the mega vaccination drive, robust recovery in the Services sector and robust growth in consumption and investment.

The Economic Survey 2020-21 report has stated that the information and broadcasting sector received foreign direct investment of $823 million in FY2020, as compared to $1.25 billion FDI received in FY2019. The FDI share of information & broadcasting stood at 0.68% of the Gross FDI inflows into the Services sector in FY 2019-20.

In April-September 2020, the FDI inflow into the information & broadcasting sector stood at $161 million, which was lower compared to the FDI received in April-September 2019, which stood at $196 million.

Agriculture is set to cushion the shock of the COVID-19 pandemic on the Indian economy in 2020-21 with a growth of 3.4 per cent, while Industry and Services sectors are estimated to contract by 9.6 per cent and 8.8 per cent during the year. In comparison, the Services sector had grown by 5.5% in FY2019-20.

Among the sub-sectors of the Services sector, ‘trade, hotels, transport, communication & broadcasting services’ is estimated to contract by 21.41%.

According to the Survey, despite the disruptions being witnessed globally, FDI equity inflows into India’s services sector grew robustly by 34% Y-o-Y during April-September 2020 to reach $23.6 billion.