GDP makes above 20% growth in first quarter, but economy still in murky state

New Delhi: India's Gross Domestic Product has registered a 20.1% in the first quarter of this financial year as compared to a 24.4% contraction in the same period last year due to the first COVID wave in the country.

"GDP at Constant (2011-12) Prices in Q1 of 2021-22 is estimated at ₹ 32.38 lakh crore, as against ₹ 26.95 lakh crore in Q1 of 2020-21, showing a growth of 20.1% as compared to a contraction of 24.4% in Q1 2020-21," the Ministry of Statistics and Programme Implementation said.

The first quarter growth is seen as the fastest since 1990, mainly driven by the returns from power generation, fuel consumption and railway freight during the period amid the COVID the second wave posed constraints.

However, the base effect as compared to the pre-COVID period is still not in favour of the economic recovery as the effects of the pandemic are still haunting the market.

In value terms, the GDP stood at Rs 32,38,020 crore in April-June 2021-22, lower than Rs 35,66,708 crore in the corresponding period of the 2019-20 financial year. The GDP had shrunk to Rs 26, 95,421 crores in April-June last year during the nationwide lockdown. To contain the second wave of the pandemic, localised and calibrated lockdowns were imposed during the first quarter of 2021-22.

Industry-wise, construction grew the most at 68.3%, versus a contraction of 49.5% in the same quarter last year. Mining saw a growth of 18.6%, as opposed to a contraction of 17.2% last year, and manufacturing grew by 49.6% as opposed to a contraction of 36% during the same period last year.

The production of eight core industries rose by 9.4% in July, against a 7.6% decline in the year-ago month, official data released on Tuesday, August 31 showed.