By Aditya Raghunath
Investing.com -- A low base helped India’s GDP , especially the manufacturing sector, to grow by 20.1% in Q1 FY22 but it wasn’t enough to beat pre-pandemic numbers (June quarter FY20), according to the Gross Domestic Product (GDP) data released by the National Statistical Office (NSO) on August 31.
The country’s manufacturing sector grew 49.6% in the June 2021 quarter but it was still 4.77% below the June FY20 levels. The second wave of the pandemic caused the economy to stumble again after it showed signs of shaking off the effects of the first wave in the March 2021 quarter.
Private consumption, the largest segment of the economy, was 12% below pre-pandemic levels. It grew just 19.3% on a very low base (-26.2%). This is a measure of the loss of income levels as a result of the second pandemic wave and low consumer sentiment.
Fixed investments, however, saw a massive rebound as they rose 55.3% to up their weightage in the GDP to 31.6%. While the rise was massive, it is still short of pre-pandemic levels.
Chief Economic Adviser Krishnamurthy V Subramanian said the data, “reaffirms the government’s prediction of an imminent V-shaped recovery”. The industry witnessed a sharp rebound, followed by services, while agriculture exhibited consistent performance. Going forward, the country is poised for stronger growth, thanks to a raft of factors already initiated. These include structural reforms enabling efficiency and productivity, Capex push, financial sector clean-up and vaccination drive.”
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