GDP Growth Of India

 

India's economy expanded by 8.4 percent year-on-year in July-September 2021, following a record 20.1 percent growth in the previous three-month period and matching market expectations. The reading marked a fourth straight quarter of expansion, as coronavirus-related disruptions continued to ease and as the economic activity rebounded helped by a faster pace of vaccinations and a drop in cases. By sectors, service activity growth was supported by increases in trade, hotels, transport & communication (8.2% vs 34.3%), financial, real estate & professional services (7.8% vs 3.7%), and public administration, defense & other services (17.4% vs 5.8%). In addition, output rose for manufacturing (5.5% vs 49.6%), mining & quarrying (15.4% vs 18.6%), utilities (8.9% vs 14.3%), construction (7.5% vs 68.3%), and agriculture (4.5%, the same as in July-September). The Reserve Bank of India has forecast annual growth of 9.5 percent in the current fiscal year. ISS coaching in Lucknow explains and covers in this article India’s GDP growth rate – whether headed up or down ?

As things stand in India, when we say that the Indian economy grew by 10 per cent in a particular quarter (that is, a period of three months) what it essentially means is that the total GDP of the country in that quarter was 10 per cent more than the total GDP produced in the same quarter a year ago.

Similarly, when we say the economy contracted by 8 per cent this year what we mean to say is that the total output of the economy (as calculated by GDP) is 8 per cent less than the total output of the economy in the preceding year.

This is called the year-on-year (YoY) method of arriving at the growth rate.

But this is not the only way to arrive at a growth rate. One could have compared GDP quarter-on-quarter (QoQ) — that is, compare the GDP in the current quarter with the GDP in the preceding quarter. For that matter, theoretically speaking, if the data were available, one could calculate the growth rate month-on-month (MoM) or even week-on-week.

 

India GDP Annual Growth Rate

The most important and the fastest growing sector of Indian economy are services. Trade, hotels, transport and communication; financing, insurance, real estate and business services and community, social and personal services account for more than 60 percent of GDP. Agriculture, forestry and fishing constitute around 12 percent of the output, but employs more than 50 percent of the labor force. Manufacturing accounts for 15 percent of GDP, construction for another 8 percent and mining, quarrying, electricity, gas and water supply for the remaining 5 percent.

India GDP Grows 8.4% in July-September

India's economy expanded by 8.4 percent year-on-year in July-September 2021, following a record 20.1 percent growth in the previous three-month period and matching market expectations. The reading marked a fourth straight quarter of expansion, as coronavirus-related disruptions continued to ease .

 

Indian Economy Expands at a Record 20.1% in Q2

The Indian economy expanded at a record 20.1% year-on-year in Q2 2021, slightly higher than market forecasts of 20%, amid a low base effect from last year and despite a second wave of covid-19 infections and localised lockdowns.

 

India GDP Growth Beats Forecasts at 1.6% in Q1

The Indian economy expanded 1.6% year-on-year in Q1 2021, accelerating from an upwardly revised 0.5% growth in Q4 and beating market forecasts of 1%. It was the 2nd straight quarter of growth since the country exit a pandemic-induced recession.

 

Commenting on India’s GDP outlook, Barnabas Gan, an economist at UOB, noted:

“In a nutshell, India’s growth prospects will depend largely on how Covid-19 evolves. India’s GDP had expanded strongly from its full-year contraction of 7.3% in FY2020/21, and anecdotal evidence from lower Covid-19 infections and higher vaccination rates are credible signals that the economy is gearing towards a more resilient growth pattern. On the back of an accommodative monetary policy expected in the year ahead, coupled with a strong fiscal response as seen from the Union Budget, we keep to our full-year growth outlook of 8.5% in FY2021/22.”

FocusEconomics panelists project GDP to expand 9.0% in FY 2021, which is down 0.2 percentage points from last month’s forecast, and increase 7.3% in FY 2022, which is up 0.2 percentage points from the previous month’s estimate.

The Economic Survey has projected the Indian economy will grow between 8 and 8.5 per cent in 2022-23, amid expectations of recovery in momentum due to the benefits of the supply-side reforms announced by the Narendra Modi government in the last two years.

However, the survey added the caveat that its projections are based on the assumption that with Covid-19 infections dipping, there won’t be further pandemic-related disruptions, and oil prices will remain in the $70-75/barrel range, among others. The price hit a fresh seven-year high of $88.85 per barrel Friday, the highest level since October 2014, according to data from the Petroleum Planning and Analysis Cell.

“This projection is also based on the assumption that there will be no further debilitating pandemic-related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year,” said the survey. 

Finance Minister Nirmala Sitharaman tabled the Economic Survey 2021-22 in Parliament Monday ahead of the Union Budget 2022-23, which she will present Tuesday.

According to the annual document, which gives projections for the forthcoming fiscal and presents a review of the financial year gone by, the supply-side reforms undertaken by the government over the last two years include deregulation of numerous sectors, simplification of processes, removal of legacy issues like ‘retrospective tax’, privatisation, production-linked incentives and so on. 

While the projected GDP growth for FY23 will make India the fastest growing economy in the world even next year, it is still below the International Monetary Fund (IMF)’s projections of 9 per cent.

The GDP growth in the ongoing fiscal (2021-22) is expected at 9.2 per cent, according to the National Statistical Office (NSO), while the Reserve Bank of India (RBI) has pegged it at 9.5 per cent.

At 9.2 per cent, India’s GDP growth in 2021-22 will be the fastest in at least 17 years. It had contracted by a record 7.3 per cent in 2020-21.

“Overall, macroeconomic stability indicators suggest that the Indian economy is well-placed to take on the challenges of 2022-23,” said the survey.