With a sharp recovery seen in GDP contraction in the second quarter period, rating agency Crisil has revised upwards its growth projections for India.

A Crisil research report said on Monday that India’s fiscal 2021 real gross domestic product (GDP) will now contract by 7.7 per cent as against a contraction of 9 per cent forecast in September.

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A faster-than-expected revival in activity in the second quarter, which continues into the festive season, is one of the reasons for the revision, the agency said in its research report.

Consistent decline in the overall Covid-19 case load is the other, it added.

Crisil, however, said that inadequate fiscal spending remains a constraint, while the possibility of a second wave of afflictions, uncertainty regarding availability of vaccine, and hiccups in global economic revival due to resurgence of cases, call for caution.

“In fiscal 2022, GDP growth is expected to spurt to 10 per cent, led by a very weak base and some global ‘rising tide’ effect. We estimate a permanent loss to the economy at 12 per cent in real GDP terms,” Crisil said.