Rebound in Economy After Covid Slump; GDP Soars by 20% in Q1 of 2021-22

India’s Gross Domestic Product (GDP) expanded by 20.1 per cent in the first quarter of the current fiscal led by revival in construction and manufacturing activities and the government’s push to infrastructure and public investment.

The record jump in the quarterly data came on the back of a low base. The GDP had contracted by 24.4 per cent during the same quarter last fiscal. This was mainly because of the nationwide lockdown imposed to curb the spread of Covid-19. During April-June 2020 quarter there was steepest contraction in the economy since independence. With 20.1 per cent expansion in April-June 2021 period, India’s GDP has come close to the level of the corresponding period in 2019.

GDP at Constant (2011-12) prices in the first quarter of 2021-22 is estimated at Rs.32.38 lakh crore, as against Rs.26.95 lakh crore in the corresponding period of 2020-21, showing a growth of 20.1 per cent as against a contraction of 24.4 percent in the first quarter of 2020-21, according to data released by the National Statistical Office (NSO).

GDP at Current Prices is estimated at Rs.51.23 lakh crore during the first quarter of 2021-22, as against Rs.38.89 lakh crore during the corresponding period of 2020-21, showing a growth of 31.7 per cent as against a contraction of 22.3 percent in Q1 2020-21.

Construction sector, which had posted a slump of 49.5 per cent during April-June 2020 period due to lockdowns, posted a steep jump of 68.3 per cent during April-June 2021.

Construction sector, which had posted a slump of 49.5 per cent during April-June 2020 period due to lockdowns, posted a steep jump of 68.3 per cent during April-June 2021.

Manufacturing sector also posted a healthy revival. The sector posted a growth of 49.6 per cent during the first quarter of the current fiscal after posting a decline of 36 per cent during the corresponding quarter last year.

Trade, hotels, transport, communication and services related to broadcasting, posted a growth of 34.3 per cent in the first quarter of the current fiscal. The second had witnessed a slump of 48.1 per cent in the first quarter of 2020-21. This clearly indicates that these services have not yet recovered from the impact of Covid-19 pandemic.

During the first quarter of 2020-21 agriculture was the only sector that had posted a positive growth. The agriculture sector growth got better in the corresponding quarter this year. Agriculture sector growth increased to 4.5 per cent in the April-June period of the current fiscal as compared to 3.5 per cent in the corresponding period of last year.

Agriculture sector growth increased to 4.5 per cent in the April-June period of the current fiscal as compared to 3.5 per cent in the corresponding period of last year.

The strong revival in the economic activities have come on the back of increased public spending, especially on infrastructure projects. Gross Fixed Capital Formation rose to 31.6 per cent in the first quarter of the current fiscal as against 24.4 percent in the same period of 2020-21.

Quarterly Gross Value Added (GVA) at Basic Price at Constant (2011-12) Prices for Q1 of 2021-22 is estimated at Rs.30.48 lakh crore, as against Rs.25.66 lakh crore in Q1 of 2020-21, showing a growth of 18.8 percent. GVA at Basic Price at Current Prices in Q1 2021-22, is estimated at Rs.46.20 lakh crore, as against Rs.36.53 lakh crore in Q1 2020-21, showing a growth of 26.5 percent.

GDP is derived as the sum of the gross value added (GVA) at basic prices, plus all taxes on products, less all subsidies on products. The total tax revenue used for GDP compilation includes non-GST revenue and GST revenue.