India’s economy grew by 20.1% during the April-June quarter of this financial year, as against a 24.4% contraction seen during the same period last year. The massive growth seen in the first quarter has made India the fastest-growing major economy across the globe.
India’s GDP at constant prices (2011-12) in the first quarter stood at Rs 32.38 lakh crore, however still lower than the Rs 35.66 lakh crore seen in the first quarter of 2019-20, signalling that India is yet to emerge from the covid induced slump.
The construction sector’s GVA was 68.3% higher than the previous year. The services sector grew at 3.7% from the year-ago period. In the previous quarter, India’s economy had grown by 1.6%. For the full financial year 2020-21, India’s GDP contracted by 7.3%.
Gross Value Added (GVA) in the economy during the April to June period rose 18.8%, as per the National Statistical Office (NSO), from a 22.2% dip in the first quarter of 2020-21. GVA from agriculture, forestry and fishing, the only sector to grow amid last year’s national lockdown, picked up pace to grow 4.5% in Q1 this year from 3.5% in Q1 2020-21.
Overall GVA in Q1 was still 7.8% lower than the first quarter of 2019-20, at ₹30,47,516 crore, while GDP remained 9.2% lower, indicating that the economy still has some way to go before it returns to activity levels prevalent prior to the pandemic.
Electricity, Gas, Water Supply & Other Utility Services, whose GVA grew 14.3% in Q1 of 2021-22, compared to a 9.9% fall last year, was the only sector along with Agriculture, Forestry and Fishing, to recover beyond the pre-pandemic levels of 2019-20.
Construction and Manufacturing GVA recorded a 68.3% and 49.6% uptick between April and June this year, compared to a 49.5% and 36% contraction, respectively, last year.
GVA from Trade, Hotels, Transport, Communication & Services related to Broadcasting recorded a 34.3% jump after dipping 48.1% in the same quarter last year. However, this employment- and contact-intensive services sector was still 30.2% below 2019-20 levels, suggesting a contraction of ₹2.1 lakh crore.
On the output front, public administration, defence and other services such as education, health and recreation grew 5.8% but remained 5% lower than the pre-pandemic level.
The Reserve Bank of India and the International Monetary Fund had revised their growth projections for the year to 9.5%. CARE Ratings revised its GDP growth estimate for the year to 9.1% from 9.2%, following the data, as it expects growth rates in the next three quarters to be progressively lower with the base effect wearing off.