The official data Tuesday also showed that the economy has surpassed the pre-Covid level
New Delhi: Powered by robust manufacturing and services’ demand, a low base and record vaccination coverage, India’s economy, or Gross Domestic Product (GDP), grew by 8.4 per cent during the second quarter of this fiscal, which is better than the RBI’s forecast of 7.9 per cent growth.
“GDP at constant (2011-12) prices in Q2 2021-22 is estimated at Rs 35.73 lakh crores, as against Rs 32.97 lakh crores in Q2 2020-21, showing a growth of 8.4 per cent,” said a statement by the ministry of statistics and programme implementation. The spurt in GDP growth in this quarter is seen mainly due to the stupendous growth in key sectors like agriculture, mining, manufacturing, electricity and water supply, transport, communication and real estate.
The bounce back in economic activity is also led by an improvement in consumer sentiment due to waning Covid infections, rising vaccination rates and the lifting of Covid-related restrictions.
The official data Tuesday also showed that the economy has surpassed the pre-Covid level. GDP growth in the April-June quarter this fiscal stood at 20.1 per cent. The Indian economy had contracted by 24.4 per cent in April-June last year.
Among the key drivers, private consumption played a major role in GDP growth. Money spent for private final consumption grew to Rs 19.48 lakh crores in the quarter under review.
As private consumption constitutes the bulk of GDP, it rose by nearly 8.6 per cent in the second quarter, indicating that consumer sentiment is gradually reviving after the debilitating impact of the second wave of Covid-19.
The other key driver was infrastructure growth, which saw a 7.5 per cent rise in October this year.
The data released by the ministry also showed that the agriculture sector grew by 4.5 per cent in the second quarter compared to three per cent in the same period last year. The manufacturing sector, which contracted by 1.5 per cent in Q2 FY21, staged a robust comeback with a growth of 5.5 per cent in the second quarter.
Economists, however, feel that despite the stupendous growth, there is also room for improvement in private investment and consumer sentiment. The economy had seen record growth of 20.1 per cent in the last quarter (April-June), compared with the same period last year, when a national lockdown due to the Covid-19 pandemic had almost halted all economic activities.
The construction sector GVA grew by 7.5 per cent compared to a de-growth of 7.2 per cent earlier. The mining sector grew by 15.4 per cent, as against a contraction of 6.5 per cent.
Electricity, gas, water supply and other utility services segment posted growth of 8.9 per cent in the second quarter of this fiscal, against 2.3 per cent expansion a year ago.
Financial, real estate and professional services’ growth stood at 7.8 per cent in Q2 FY22 compared to a contraction of 9.1 per cent. Public administration, defence and other services grew at 17.4 per cent during the quarter under review, compared to 9.2 per cent contraction a year earlier.