Form of words:
New Delhi: The Indian economy grew at a record rate of 20.1 per cent in the first quarter of the current fiscal, but still lags behind the production levels seen in the pre-Covid-19 era, data released by the National Statistical Office (NSO) showed on Tuesday. .
The economy had contracted a record 24.4 per cent in the first quarter of 2020-21 as the first wave of the pandemic saw the government announce a nationwide lockdown, which halted most economic activity.
NSO data showed that GDP in Q1 of 2021-22 at constant prices stood at Rs 32.4 lakh crore, compared to Rs 26.9 lakh crore in Q1 of 2020-21 and Rs 35.7 lakh crore in Q1 of 2019-20 . The first quarter of this year coincides with the devastating second wave of the pandemic while the first quarter of last fiscal coincides with the first wave.
Economists point out that the data suggests that the economic impact of the first wave of the pandemic was much more severe than that of the second wave, although India still has a long way to go to achieve its pre-pandemic production levels.
NSO data shows that agriculture grew by 4.5 percent, manufacturing grew by 50 percent, construction grew by 68 percent, and trade, hotels and restaurants grew by 34.3 percent compared to the same period last year. increased. However, barring agriculture and power, gas and water supply, none of the other sectors saw their output surpass their levels in the first quarter of 2019-20.
The NSO data also shows that private final consumption expenditure and gross fixed capital formation grew at 19 per cent and 55 per cent, respectively, over the year-ago period, but from the levels seen in the first quarter of 2019-20. was pretty low. However, the final consumption expenditure of the government decreased by 5 per cent over the previous year.
Chief Economic Advisor Krishnamurthy Subramaniam said that the GDP figures show that the economy is on the path of recovery.
While the health impact of the second wave was significant, the impact on the economy has not been severe, he said in a press briefing after the GDP announcement, pointing out that a V-shaped recovery is underway.
India is poised for strong growth due to the structural reforms that have been announced, he said, adding that the full-year GDP growth is likely to be around 11 per cent.
what do economists say
Economists Sunil Kumar Sinha and Paras Jasrai, India Ratings and Research pointed out that despite the second wave of Covid, economic activities survived as local/regional restrictions were not as stringent as they were during the first wave.
“However, to put things in perspective, the level of GDP in the first quarter of 2021-22 is still 9.2% lower than the level achieved in the first quarter of 2019-20. This indicates that the Indian economy had lost some ground due to the positive quarterly GDP growth of 0.5% in 3QFY21 and 1.6% in 4QFY21 due to COVID 2.0,” he said in a note.
Aditi Nair, Chief Economist, ICRA Ltd., said the low premise of last year’s stringent nationwide lockdown hid the impact of the second wave of COVID-19.
“However, the sharp YoY expansion in Q1 FY2022 is analytically misleading, with a gradual slowdown of 16.9% over Q4 FY2021 and a decrease of 9.2% relative to the pre-Covid level of Q1 FY2020,” she said.
“Manufacturing and construction were the key drivers of the pickup in GVA growth in Q1 FY2022, while on the expenditure side, private consumption and investment driven the YoY change in GDP performance. Nevertheless, all these sectors remained well below their pre-Covid levels in Q1 FY2022. On a serious note, only agriculture and electricity posted higher GVA in real terms relative to their pre-Covid performance,” Nair said.
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