GDP grows at 8.4 pc in Q2; India maintains status as fastest growing economy
   Date :01-Dec-2021

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NEW DELHI :
 
THE Indian economy remained on track to post the fastest growth among major economies this year as its GDP expanded by a better-than-expected 8.4 per cent in the July-September quarter to cross pre-pandemic levels. The GDP growth in the second quarter of the current fiscal (2021-22) was slower than the 20.1 per cent expansion in the previous quarter -- which largely reflected a bounce back from last year’s crash -- but was better than the contraction of 7.4 per cent in July-September 2020, official data released on Tuesday showed. With economic activities returning back to normalcy post the second wave of pandemic earlier this year, this is the fourth consecutive quarter of positive growth after a two-quarter contraction witnessed last year.
 
The Q2 FY22 GDP print reflects a healthy recovery in private consumption expenditure driven by an unlock of the economy, the declining intensity of the pandemic and the significant progress on vaccination. The growth of 8.7 per cent in Government expenditure over the corresponding period of the previous year and low-interest rates boosted consumption. Agriculture chipped in on the back of a good monsoon, delivering back-to-back 4.5 per cent growth. Manufacturing posted a 5.5 per cent increase, reflecting both a recovery in domestic demand and buoyant exports. The effect of unlocking was reflected in the 7-8 per cent growth in construction, trade, hotels, transport and financial services. What seemed to have moved the needle meaningfully was the strong 17.4 per cent growth in Government services that include public administration and defence.
 
The absolute real GDP value at Rs 35.73 lakh crore has exceeded the pre-pandemic levels of Q2 FY20 by 0.33 per cent. The GDP had shrunk to Rs 32.96 lakh crore in July-September last year during the nationwide lockdown. GVA clocked 8.5 per cent year-on-year growth in July-September 2021 and the data shows broad-based expansion across sectors. While private consumption is likely to pick up as the economy nears complete normalisation, a new coronavirus variant has emerged as the top threat to global recovery.