The Indian economy emerged out of technical recession in October-December 2020 and grew 0.4 per cent with improvement in manufacturing, construction and agriculture.
According to the second advance estimates released by the National Statistical Office on Friday, 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. The estimates were likely to undergo “sharp revisions” since data collection for IIP and CPI were impacted due to restrictions imposed in March last year in view of the pandemic.
In a statement, the Finance Ministry said the Q3 numbers were a reflection of the further strengthening of a V-shaped recovery, Indian economy but warned that India was not yet out of the danger of the pandemic.
The GDP had contracted by 23.9 per cent and 7.5 per cent in the April-June and July-September quarters, respectively, marking a technical recession in the aftermath of the Covid-19 pandemic. The GDP rates for Q1 and Q2 have now been revised to (-)24.4 per cent and (-)7.3 per cent, respectively.
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, and 2.9 per cent contraction in October-December 2019. 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, and 1.3 per cent contraction during the same period last year.
The GDP growth estimate of 0.4 per cent for the third quarter this year is higher than 0.1 per cent growth projected by the Reserve Bank of India. In the corresponding quarter last year, the economy had grown 3.3 per cent.
Growth in agriculture picked pace and jumped 3.9 per cent in October-December compared with 3 per cent growth in July-September and 3.4 per cent growth during the corresponding quarter last year.
Financial, real estate and professional services grew 6.6 per cent as against 9.5 per cent contraction in the previous quarter and 5.5 per cent growth in the corresponding period last year.
Mining, trade, hotels, transport, communication and broadcasting services and public administration services continued to stay in the negative territory in the third quarter registering a contraction of 5.9 per cent, 7.7 per cent, and 1.5 per cent, respectively.