India’s Gross Domestic Product growth rate for the third quarter (October-December) came at 0.4%, government data showed on Friday. With this, the economy once again entered the territory of positive growth after contracting in two successive quarters.

However, the government has revised the second advanced estimate for the full financial year 2020-’21 to project a sharper decline of 8%, as compared to the 7.7% contraction it had predicted in the first advanced estimate in January.

Moreover, the contractions in the first two quarters of this fiscal have also undergone negative revisions. The 23.9% contraction in first quarter (April-June) has been revised to -24.4%, while the 7.5% decline in second quarter has been revised to -8%, according to the data.

As far as sectors are concerned, electricity, gas and water supply logged the highest growth rate in the third quarter at 7.3%, as compared to 2.3% in the last quarter. Construction, which is a labour-intensive sector and generates jobs, saw a 6.2% growth, compared to a contraction of 7.2% in the last quarter. Agriculture grew by 3.9%, compared to 3% in the second quarter. However three sectors – mining, hotels, transports & communication and public administration remained in the negative growth territory in this quarter as well.

The third quarter GDP growth number is above the Reserve Bank of India’s estimates, which last month predicted the economy to grow by 0.1% in the three-month period. However, market analysts had predicted a stronger show with ICRA Ltd and HDFC Bank projecting a 0.7% and 0.8% growth rate, respectively, according to Mint. The State Bank of India had projected a 0.3% growth, according to PTI.

Meanwhile, equity markets witnessed a massive slump ahead of the release of GDP numbers. The 30-share BSE Sensex slipped 1,939.32 points (-3.80%) to finish at 49,099.99, while the broader 50-share NSE Nifty shed 568.20 points to close at 14,529.15.

Core sector growth also turns positive

The output of eight core infrastructure sectors increased by 0.1% in January, marking the first positive growth in 11 months, another set of data released by the government on Friday showed. The core sector growth had shrunk by 1.3% in December.

For April-January 2020, the core sector output, on a cumulative basis, shrunk 8.8% against a 0.8% growth in the same period a year earlier, the data showed.

Output of Coal, crude oil, natural gas, refinery products and cement saw a contraction in January, while fertiliser, steel and electricity grew by 2.7%, 2.6% and 5.1%, respectively.