India’s Gross Domestic Product in the first quarter (April-June) of the financial year 2021-’22 grew by 20.1%, government data showed on Tuesday.
The number marked the fastest rate of growth in India in a quarter. However, it was built on a low base after an unprecedented contraction of 24.4% in the first quarter of the previous financial year.
“The growth rates in 2021-22 in some cases are unduly high due to the low base,” the Ministry of Statistics and Programme Implementation also noted in its release.
Economic data like GDP growth rate are calculated on a year-on-year basis. So, a low growth rate in the previous year leads to a low base for the current year’s numbers.
Hit by a nationwide lockdown due to the coronavirus pandemic, India’s economic activities were stalled during the April-June period last year. For the entire financial year of 2020-’21, the Indian economy contracted by 7.3%.
The economy has, in fact, grown at a slower pace in the first quarter compared to the fourth quarter (January-March) of the previous financial year. The country’s GDP in the April-June quarter of this financial year rose by Rs 51.2 lakh crore. It had grown by Rs 56.8 lakh crore in the fourth quarter of the previous fiscal, government data showed.
All sectors showed an uptick in their growth rates compared to the same quarter in the previous financial year.
The manufacturing and construction sectors, which were the worst hurt during last year’s lockdown, grew at the fastest pace. The manufacturing growth rate was 49.6%, while construction grew by 69.3%. Agriculture, which had registered growth even last year, grew by 4.5% in the April-June quarter in this financial year.
Ahead of release of the GDP data, experts pointed out that the second wave of the coronavirus pandemic had hurt the recovery of India’s economy.
Rahul Bajoria, chief India economist at Barclays, told Reuters that the second wave proved to be a stumbling block for the economy. “Still, the economic damage appears to be less than previously expected,” he added.
Several ratings agencies have already revised their growth forecasts for India in this financial year to under 10%, from their earlier predictions of a double-digit rise in GDP. On June 4, the Reserve Bank of India also revised its estimates for 2021-’22 to 9.5% from previous forecast of 10.5%.