New Delhi: (Indian economy news) Signalling that an economic recovery was underway before the second wave of COVID-19 infections broke out, India's economy grew at 1.6 percent in the March quarter of FY21 as opposed to 0.5 percent in the December quarter, Gross Domestic Product (GDP) figures released by the Central Statistics Office (CSO) showed. The official data also showed that the Indian economy contracted by 7.3 percent in FY21, doing slightly better than what the second advance estimates had predicted.
According to the second advance estimates released in February, Indian economy was expected to contract by 8 percent. In FY20, India's GDP was at 4 percent.
Gross value added (GVA) — which is another method of measuring the economic activity — grew at 3.7 percent in the March quarter of FY21 as opposed to 1 percent in the December quarter. Economists consider GVA to be a better metric for measuring production in an economy under the current circumstances. For the entire financial year 2020-21, GVA contracted by 6.2 percent.
Manufacturing in Q4 of FY21 recovered to 6.9 percent against 1.7 percent recorded in Q3. Recovery was also seen in construction activities (14.5 percent), electricity (9.1 percent) and public expenditure (2.3 percent) in the March quarter.
Although Indian economic growth is expected to show double-digit growth in the June quarter of FY21, however, it will primarily be attributed to a 24.4 percent contraction in the corresponding quarter of the previous financial year. Overall, India's economic growth is expected to take a significant hit in this financial year due to the second COVID-19 wave.
The latest round of FICCI's Business Confidence Survey has also revealed a sharp deterioration in the optimism level of corporate India vis-a-vis the previous survey. Worsening current conditions as well as muted expectations about the near-term prospects on the back of a sweeping second wave of coronavirus infections pulled down the overall index value by over 20 points. The Overall Business Confidence Index nosedived and stood at 51.5 in the current round after reporting a decadal high value of 74.2 in the previous survey round, said FICCI on Monday.
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