India’s Gross Domestic Product (GDP) increases 0.4% year-on-year basis during the October-December quarter. Growth attributed to calibrated fiscal stimulus and smart handling of lockdown.
India’s GDP Increases
While India’s GDP for the financial year 2020-21 (FY21) contracted 8%, it grew by 0.4% in the third quarter of the year. The Ministry of Statistics and Programme Implementation (MoSPI) report revealed that the Q1 saw the worst contraction of 24.4 per cent in the history of the Indian economy. Further, GDP during the July-September quarter (Q2) contracted by 7.3% instead of the previous estimate of negative 7.5%. Also, nominal GDP has improved with the growth rates of -22.2%, -4.2% and 5.3% for Q1, Q2 and Q3, respectively. However, Indian economy may contract by 1% in Q4 owing to the subsidy payouts of the current quarter.
India GDP Q3 Data
While the manufacturing sector grew by 1.6 per cent in Q3, the agriculture, forestry and fishing sector rose by 3.9%. Also, the construction sector recovered from a contraction of 49.4% in Q1 to a growth of 6.2% in Q3. However, hotels, transport, communication and services related to broadcasting registered a contraction of 7.7 per cent in Q3. Agriculture is the only sector which grew in all three quarters of the financial year 2020-21.
Experts Express Confidence Over Growth
Commenting on the growth, India Inc said that third-quarter growth numbers are a positive indicator for the economy. Expressing confidence, Industry bodies said that the GDP would improve in the coming months on the back of the government’s incentives like the Production Linked Incentive scheme. Also, Sakshi Gupta, senior economist, HDFC Bank, said, ‘”We expect growth to print at 1.5% in Q4 and -7.5% for the whole year FY21.” Further, she added that the economy would see a K-shaped recovery, with some sectors growing fast than others.
Siddhartha Sanyal, chief economist and head of research, Bandhan Bank, explained that though GDP growth expectations for FY22 are strong, its path can be uneven and uncertain.