GDP grows 1.6% in Q4 2020-21 from 0.5% in Q3

NEW DELHI: India’s gross domestic product (GDP) for the fourth quarter (Q4) ended March 31, 2021 stood at 1.6 per cent, government data released on Monday showed.
GDP had grown by 3 per cent in the January-March quarter in the previous year.
“Real GDP at constant (2011-12) prices in the year 2020-21 is now estimated to attain a level of Rs 135.13 lakh crore, as against the first revised estimate of GDP for the year 2019-20 of Rs 145.69 lakh crore, released on January 29, 2021,” data released by ministry of statistics and programme implementation showed.
For the full year of 2020-21, growth in GDP is estimated at -7.3 per cent as compared to 4 per cent in 2019-20. This is the first yearly economic contraction in 40 years. In 1979-80, GDP had shrunk by 5.2 per cent.
The economy had grown by 4 per cent in the previous 2019-20 fiscal.
The strict nationwide lockdown imposed to curb the spread of Covid-19 last year led India to experience its first technical recession with two consecutive quarters of contraction.
In the first quarter of this fiscal, the economy had shrunk by an unprecedented 24.4 per cent. However, due to spurt in economic activities in the second quarter, GDP decline had narrowed to 7.3 per cent.
The economy officially exited the technical recession phase in the third quarter ended December 2020, owing to resumption of economic activities. GDP grew 0.5 per cent in the third quarter.
According to the NSO data, gross value added (GVA) growth in the manufacturing sector accelerated to 6.9 per cent in the fourth quarter of 2020-21 compared to a contraction 4.2 per cent a year ago.
Farm sector GVA growth was down at 3.1 per cent, compared to 6.8 per cent in the corresponding period of 2019-20.
Construction sector GVA grew by 14.5 per cent from 0.7 per cent growth earlier. Mining sector shrank by 5.7 per cent, as against a contraction of 0.9 per cent a year ago.
Addressing the media after release of GDP numbers, chief economic advisor (CEA) Krishnamurthy Subramanian said that the contraction in annual GDP is mainly due to the effect of the pandemic. Overall economic impact of second COVID-19 wave not likely to be very large, he added.
“Agriculture sector has been the silver lining, see steady demand in second half of the year,” he said.
Stressing on vaccinating the masses against Covid-19, the CEA said: “There is a need to enhance pace of vaccination for lowering likelihood of another Covid-19 wave.”
With the second wave in progress, the Reserve Bank of India (RBI) in its recently released annual report said that the economy has not moderated as much as it did during the first wave of the coronavirus, but uncertainties may act as a short-term deterrent and private demand will be key to revival.
It further added that the country’s growth prospects now essentially depend on how fast India can arrest its second wave of Covid-19 infections.
The second wave of Covid cases started to peak from the second week of May, with daily fresh cases touching a high of over 4 lakh. However, cases have now begun to decline.
The economy, which was facing a slowdown even before the pandemic, now confronts a crash of consumer demand – constituting over 55 per cent of the economy – as household incomes and jobs have declined.
Meanwhile, unemployment soared to a near one-year high of 14.73 per cent in the week ending May 23, according to the Centre for Monitoring Indian Economy.

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