India exits recession, GDP grows 0.4% for Q3 2020-21
India's economy grew by 0.4% in the third quarter of the financial year 2020-21, government data released on Friday showed. The development comes after two consecutive quarters of Gross Domestic Product (GDP) contraction at the height of the coronavirus pandemic in India. Notably, India had slipped into a technical recession during the July-September quarter FY2020-21. Here are more details.
Data released by the National Statistics Office (NSO), which falls under the Ministry of Statistics & Programme Implementation (MoSPI), revealed that India's GDP showed marginal growth in the October-December quarter, expanding 0.4% year-on-year. Indian economy had grown at the rate of 4.7% in the same quarter last year. Meanwhile, Gross Value Added (GVA) grew 1% year-on-year in the quarter under review.
The Ministry also revised its GDP projections in the previous two quarters: Q1 (April-June) and Q2 (July-September). "Real GDP has shown marked improvement over the quarters of the Financial Year (FY) with growth rates of -24.4%, -7.3%, and 0.4% for Q1, Q2, and Q3 respectively," it said. Earlier, the GDP estimates for Q1 and Q2 were -23.9% and -7.5%.
Further, the NSO has projected an 8% contraction in FY2020-21 in its second advance estimate. According to the first advance estimate, which was released in January, the government had estimated that the GDP will contract by 7.7% in FY2020-21.
Sakshi Gupta, senior economist at HDFC Bank, told Mint, "Q3 GDP was slightly lower than expectations." "We expect growth to print at 1.5% in Q4 and -7.5% for the whole year FY21. We expect GDP for FY22 at 11.5%. We expect the economy to reach pre-pandemic output levels by the end of the calendar year 2021," she added.