State Bank of India’s research report Ecowrap expects the country’s GDP to contract by 16.5 per cent during the first quarter of the current fiscal.

Earlier in May, Ecowrap had estimated Q1 FY21 GDP contraction at over 20 per cent and now pegs it at much lower contraction of 16.5 per cent for the quarter, “though with the relevant caveats in the current uncertain scenario”, the research report released on Monday stated.

It said degrowth in corporate GVA (better than expected results of some financial and non-financial companies) has been significantly better than revenue degrowth in Q1 FY21 as far as the results of the listed companies are concerned.

So far, around 1,000 listed entities have announced their results for the first quarter. The results indicate more than 25 per cent decline in topline and more than 55 per cent decline in bottomline.

However, it is interesting to mention that the decline in corporate GVA (gross value added) is only 14.1 per cent, it said.

“In principle, revenue decline of listed companies has been far outstripped by cost rationalisation thereby not impacting margins, the report said.

It further said over the months of July and August, coronavirus has now significantly penetrated the rural areas. The percentage of cases in rural districts to total new cases has risen to 54 per cent in August.

Also, the number of rural districts with less than 10 cases have reduced significantly. Andhra Pradesh and Maharashtra have been impacted more severely with increasing coronavirus penetration in rural areas.

“These districts contribute mostly around 2-4 per cent of GSDP (gross state domestic product) of their respective states, indicating that cases are penetrating deep rural hinterlands,” the report noted.

The report estimates total (GSDP) loss due to COVID-19 to be at 16.8 per cent of GSDP.

State-wise analysis indicates that top 10 states accounted for 73.8 per cent of total GDP loss, with Maharashtra contributing 14.2 per cent of total loss followed by Tamil Nadu (9.2 per cent) and Uttar Pradesh (8.2 per cent), it said.

Subsequently, the per capita loss for all India is around Rs 27,000 with states like Tamil Nadu, Gujarat, Telangana, Delhi, Haryana, Goa, exhibiting loss of more than Rs 40,000 per person in FY21, the report stated.