After contracting for two straight quarters, Indian economy witnessed marginal growth of in the October-December quarter.
India’s gross domestic product (GDP) grew 0.4% year-on-year, official data released by the National Statistics Office showed on Friday.
The sharp V- shaped recovery has been driven by rebounds in both Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF)
The recovery is due to astute handling of the lockdown and a calibrated fiscal stimulus, the government said.
GDP in Q2 & Q1
In the July-September (Q2) quarter, India’s GDP contracted 7.5% year-on-year.
The economy shrank 23.9% year-on-year in the April-June quarter (Q1) in the wake of coronavirus outbreak and nationwide lockdown to prevent the virus.
GVA
The growth rate in terms of gross value added (GVA) — which is GDP minus net product taxes, and reflects growth in supply — is seen contracting 6.5 per cent in 2020-21 as against earlier estimate of 7.2 per cent and 3.9 per cent in the previous year.
Gross fixed capital formation
On the expenditure side, gross fixed capital formation — an indicator for private investment — picked up pace to grow 2.6 per cent in October-December.
Government Expenditure
Government final consumption expenditure contracted by 1.1 per cent in October-December, while other drivers of demand in the form of private consumption expenditure contracted by 2.4 per cent.
Per Capita Income
The per capita income at current prices during 2020-21 is estimated to be at Rs 1,27,768, a decline of 4.8% as compared to Rs 1,34,186 during 2019-20.
Trending Sectors:
Agriculture Sector
The agriculture sector, which stood out as the only growing sector of the economy in the previous two sectors, continued its run to register a 3.9 percent rise in the latest quarter.
Updated figures show it had grown by 3 percent in the second quarter.
Manufacturing Sector
The manufacturing sector grew 1.6 per cent as against a contraction of 1.5 per cent in the previous quarter, and 2.9 per cent contraction in October-December 2019.
Construction Sector
The construction sector also gained momentum, growing 6.2 per cent in October-December 2020, as against a contraction of 7.2 per cent in the previous quarter, and 1.3 per cent contraction during the same period last year.
Energy Sector
The Electricity and other public utilities grew 7.3% against a growth of 4.4% in Q2.
Financial Sector
Financial, real estate and professional services grew 6.6 per cent as against 9.5 per cent contraction in the previous quarter and 5.5 per cent growth in the corresponding period last year.
Mining, Trade, Hotels, Transport Sector
Mining, trade, hotels, transport, communication and broadcasting services and public administration services continued to stay in the negative territory in the third quarter registering a contraction of 5.9 per cent, 7.7 per cent, and 1.5 per cent, respectively.
Comment From Economist
Rahul Bajoria, chief India economist at Barclays said:
“The gap between headline and core GDP, excluding agriculture and government spending, closed further, with core GDP contracting only 0.2% in Q3FY21.
That indicates that private sector activity is now broadly growing in sync with the increase in fiscal support, which broadened beyond welfare spending and transfers during the quarter.”
Press the 🔔 Icon for notifications of all new updates
