India's gross domestic product (GDP) grew at 8.4 percent in the July-September quarter of the fiscal year 2021-22, according to official data released by the government on Tuesday evening.
A CNBC-TV18 Poll had estimated the GDP to 8.1 percent. The GDP growth in the April-June quarter of this fiscal stood at 20.1 percent.
The GDP had contracted by 7.4 percent in the corresponding July-September quarter of 2020-21, according to data released by the National Statistical Office (NSO).
GDP at Constant (2011-12) Prices in April-September 2021-22 (H1 2021-22) is estimated at Rs 68.11 lakh crore as against Rs 59.92 lakh crore during the corresponding period of the previous year, showing a growth of 13.7 percent in H1 2021-22 as against a contraction of 15.9 percent during the same period last year, it stated.
The growth of 8.7 percent 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 percent increase, reflecting both a recovery in domestic demand and buoyant exports. The effect of unlocking was reflected in the 7-8 percent growth in construction, trade, hotels, transport and financial services. What seemed to have moved the needle meaningfully was the strong 17.4 percent 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 percent. The GDP had shrunk to Rs 32.96 lakh crore in July-September last year during the nationwide lockdown.
GVA clocked 8.5 percent 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.
Chief Economic Adviser (CEA) K V Subramanian said India is expected to log double-digit growth in the current financial year (April 2021 to March 2022), aided by rising demand and a robust banking sector.
"The overall growth for the first half has been 13.7 per cent so even a little more than 6 per cent growth in the subsequent quarters should be able to deliver double-digit growth for this year," he said.
India's GDP projection for 2021 compares with 8 per cent projected for China and 6 percent for the US. China has logged a growth of 4.9 percent in the July-September period of 2021. He also said the seminal second-generation reforms would help the country grow by over 7 percent during this decade.
With regard to fiscal deficit, he said the Budget estimate is likely to be met. The government estimates a fiscal deficit of 6.8 percent of the gross domestic product (GDP) for the current financial year ending on March 31, 2022.
Separately, core sector data was released, which showed a revival in October at 7.5 per cent as compared to a moderation seen at 4.5 per cent in the previous month. The sharp sequential growth of the core index at 7.3 percent was driven by a massive recovery in coal production along with healthy sequential growth in output of cement, fertilisers and refinery products.
Except for electricity generation, which has seen a slight sequential contraction due to both seasonal factors and the earlier coal shortage, there has been a broad-based growth across all the core segments, raising hopes of an improving momentum in industrial activity.
The core sector output has exceeded the pre-pandemic levels with the weighted average index in April-October higher by 0.6 per cent as compared to the same period in 2019.
Six segments of the core sector have shown healthy positive growth over this seven-month period vis-a-vis that in FY20, except for crude oil and refined petroleum products.
According to the NSO data, gross value added (GVA) growth in the manufacturing sector accelerated to 5.5 percent in the second quarter of 2021-22, compared to a contraction 1.5 percent a year ago.