Data related to economic activity in third quarter of financial year 2020-21 shows that Indian economy has come out of the woods. In October-December 2020 quarter, the country’s GDP growth turned positive, registering an increment of 0.4 per cent owing to the improvement in manufacturing, construction and agriculture.
According to the second advance estimates released by the National Statistical Office, the economy will, however, face a deeper 8 per cent
contraction for the full year 2020-21, as against the earlier estimate of 7.7 per cent.
NSO’s second advance estimates are obtained by extrapolating indicators like the Index of Industrial Production (IIP) of the first nine months of the financial year. In a statement, the Finance Ministry said the Q3 numbers were a reflection of the further strengthening of a V-shaped recovery, but warned that India was not yet out of the danger of the pandemic.
The GDP had contracted by 24.4 per cent and 7.3 per cent in the April-June and July-September quarters, respectively, marking a technical recession in the aftermath of the Covid-19 pandemic. In the third quarter, the manufacturing sector grew 1.6 per cent as against a contraction of 1.5 per cent in the previous quarter.
The construction sector also gained momentum, growing 6.2 per cent in October-December 2020, as against a contraction of 7.2 per cent in the previous quarter. Agriculture witnessed an increase of 3.9 per cent in October-December, rising up from 3 per cent in July-September.