India's Gross Domestic Product (GDP) grew 20.1% in the April-June quarter of this financial year (FY22), due to a low base during the same quarter last year. In the same quarter last year, GDP had contracted by 24.4% due to the first lockdown being imposed last year during the April-June period. Last quarter (January-March of FY21), India's GDP grew at 1.6%.
“GDP at Constant (2011-12) Prices in Q1 of 2021-22 is estimated at ₹ 32.38 lakh crore, as against ₹ 26.95 lakh crore in Q1 of 2020-21, showing a growth of 20.1% as compared to a contraction of 24.4% in Q1 2020-21," the Ministry of Statistics and Programme Implementation said.
This would make it the fastest-ever growth since quarterly data was made available in the 1990s. However, due to a base effect — where there is a larger percentage change despite not such a significant absolute change — the economy is still reeling from the effects of the pandemic, with the quarter in question impacted due to the second wave of the coronavirus pandemic. In value terms, the GDP stood at Rs 32,38,020 crore in April-June 2021-22, lower than Rs 35,66,708 crore in the corresponding period of the 2019-20 financial year. The GDP had shrunk to Rs 26,95,421 crore in April-June last year during the nationwide lockdown. With a view to containing the second wave of the pandemic, localised and calibrated lockdowns were imposed during the first quarter of 2021-22.
Industry-wise, construction grew the most at 68.3%, versus a contraction of 49.5% in the same quarter last year. Mining saw a growth of 18.6%, as opposed to a contraction of 17.2% last year, and manufacturing grew by 49.6% as opposed to a contraction of 36% during the same period last year. The production of eight core industries rose by 9.4% in July, against a 7.6% decline in the year-ago month, official data released on Tuesday, August 31 showed.
Siddhartha Sanyal, Chief Economist and Head – Research at Bandhan Bank said the growth is broadly on expected lines. “While this is a sharp uptick optically, this should not lead to any exuberance as the statistical effect of the 24.4% contraction in the corresponding quarter of the previous financial year played a dominant role in pushing the current print higher,” he said. “Going ahead, without any fresh headwinds as regards the Covid-19 scenario, GDP growth is expected to hover around the mid-single digit zone. Overall, the need for continued policy support for the real economy remains strong given the nascent and uneven nature of the recovery. Progress of vaccination will likely remain a key factor in ensuring medium term sustainability of recovery in economic activities,” he added.
In addition, data released on Tuesday, August 31, for the production of coal, natural gas, refinery products, fertilisers, steel, cement and electricity industries showed that it had increased in July 2021 over the corresponding period of last year, according to the Department for Promotion of Industry and Internal Trade data. Crude oil production, however, dropped by 3.2%.
Core sectors had recorded a 7.6% decline in output in July 2020 due to the impact of COVID-19-related restrictions, while the infrastructure sectors had expanded by 9.3% in June 2021. For April-July 2021-22, the sectors grew by 21.2% compared to the corresponding period of the last financial year.
(With PTI inputs)