New Delhi: As Covid-19 disruptions ease, India’s gross domestic product (GDP) growth rate for the second quarter of the fiscal year 2021-22 (FY22) reached 8.4%, down from a contraction of 7.4% in the corresponding period of the previous fiscal year, government data showed Tuesday.
According to data released by the Ministry of Statistics and Program Implementation, GDP at constant prices (2011-12) in the second quarter of 2021-22 is estimated at Rs 35.73 lakh crores, against Rs 32.97 lakh crores in the second quarter of 2020-21, showing growth of 8.4% against a contraction of 7.4% in the second quarter of 2020-2021.
This is the fourth consecutive quarter of expansion. However, the economy has now passed pre-Covid levels.
The economic recovery strengthened in the July-September quarter, aided by a pickup in consumer spending, although the spread of the new variant of the Omicron coronavirus is raising fears for the future. The economy accelerated and gradually returned to normal as Covid-related disruptions abated following a devastating second wave.
Data shows nominal GDP grew 17.5 percent for the second quarter of the current fiscal year.
Gross value added (GVA) increased 8.5 percent in the second quarter, compared to 7.3 percent in the same quarter last year. Private final consumption expenditure reached Rs 19.48 lakh crore during the quarter under review.
The output of the eight key sectors grew 7.5 percent in October this year, while the budget deficit reached 36.3 percent of the full-year budget estimate for the first seven months.
Private final consumption expenditure (PFCE) in the July-September quarter grew 8.61 percent year-on-year in the second quarter, but down from a 19.35 percent year-on-year increase in the first trimester.
India’s GDP figures for the second quarter were in line with most projections from major brokers and financial institutions.
India, which is Asia’s third-largest economy, has rebounded from last year’s crisis, spurred by rising vaccination rates and a pick-up in public spending.
The Reserve Bank of India (RBI) in October kept its growth forecast at 9.5% for fiscal year 22. The economy is expected to reach 7.9% in the second quarter, 6.8% in the third quarter, and 6.1% in the fourth quarter of 2021-2022, the RBI said.
Economists say India’s economy is set to pick up, aided by resilient growth in the agricultural sector, however, risks included slowing global growth, rising manufacturing prices, and newer variants of Covid-19.
In a final tweet, Chief Economic Adviser Dr. Krishnamurthy Subramanian said: “Conceptually India’s policy response focused on both demand and supply has been very important in the most dramatic recoveries of any economy emerging markets and maintaining an inflation range. Compared to 2020, there was a 38.3% increase in capital expenditure in the first half of 2021, which is remarkable much higher this year, it’s important to understand the dynamics of inflation. ”