GDP growth in Q1 records 20.1% recovery on low base – Times of India

NEW DELHI: Economic growth soared to a record high in the April-June quarter due to a low base and a rebound in manufacturing and construction, as well as robust growth in agriculture, which has remained resilient throughout the pandemic.
Data released by the National Statistical Office (NSO) on Tuesday showed GDP growth rose 20.1% in the three months to June, the first quarter of the 2021-22 fiscal year, compared with a record contraction of 24.4% in the year-ago period. It was also higher than 1.6% growth recorded in January-March 2021. Experts said while the recovery is gathering momentum, the first quarter numbers should be interpreted with some caution as the economy is still to recover lost ground after the bruising impact of the lockdows and curbs to prevent the spread of the Covid-19 infection.

The latest June quarter numbers are close to the Reserve Bank of India’s forecast of 21.4%.
A spate of indicators in the past few months have shown that several sectors have staged a robust rebound although some sectors, particularly in the crucial services segment, are yet to recover fully.
“The Q1:2021-22 data reaffirms the government’s prediction of an imminent V-shaped recovery made last year at this time. Increase of 20.1% in GDP -- despite the intense second wave in the months of April-May -- highlights the continued economic recovery,” said Krishnamurthy Subramanian, chief economic adviser.
Subramanian had been consistently maintaining since last year that the economy would stage a V-shaped recovery despite the lockdowns. The June quarter numbers are also expected to validate the government’s confidence of a sharp rebound and its pursuit of reforms to bolster growth against the backdrop of a raging pandemic.
Economists said India remains one of the select few countries that have witnessed growth (year-on-year) for three quarters in a row and is among the fastest growing economies during the April-June quarter.
The manufacturing sector grew 49.6% year-on-year in the June quarter, compared with a 36% contraction in the year earlier quarter while the construction sector rose 68.3%. The farm sector grew 4.5% in the three months to June compared to the 3.5% posted in the year earlier period.
While several indicators have shown robust signs of recovery the overall economy still has a long way to catch up with the pre-pandemic levels. Aditi Nayar, principal economist at ICRA, said the sharp year-on-year expansion in the June quarter is analytically misleading, with a sequential slowdown of 16.9% over Q4 FY2021 and a shortfall of 9.2% relative to the pre-Covid level of Q1 FY2020.