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New Delhi
India has limped out of a coronavirus pandemic-driven recession with quarterly growth of 0.4 per cent, gross domestic product data (GDP) released on Friday showed.
The Indian economy grew by 0.4 per cent in the October-to-December quarter after two successive quarters of contraction, according to data from the National Statistical Office (NSO). India’s financial year runs from April to March.
The economy reported its worst-ever quarterly decline - 23.9 per cent - in the April-June quarter after the pandemic-induced lockdown brought economic activity to a halt and rendered millions of people jobless.
The July-September quarter saw a contraction of 7.5 per cent.
The ministry on Friday revised the GDP data for the April-June and July-September quarters to minus 24.4 per cent and minus 7.3 per cent, respectively.
The NSO forecast GDP contraction of 8 per cent for the 2020-2021 year, worse than an earlier projection of a 7.7-per-cent decline.
India has been gradually reopening economic activity and easing restrictions on mobility since mid-May. This easing was accompanied by a fall in new Covid-19 infections since October, along with high recovery rates.
The country of 1.3 billion, however, saw a fresh spike in Covid-19 cases in February, raising concerns that a second wave, like one in Europe, could stymie the growth path.
The country reported 16,577 Covid-19 infections and 120 deaths on Thursday, surpassing the average of below 10,000 cases and 100 deaths a day in January. About 86 per cent of these have been reported from six states.
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 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.
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