India’s GDP has grown 1.6 per cent in the fourth quarter of FY21 (Q4FY21) after growing 0.4 per cent in the December quarter. The full-year GDP for FY21 has also been revised to -7.3 per cent from -8 per cent.

ndia’s gross domestic product (GDP) grew 1.6 per cent in the fourth quarter of 2021, marking two quarters of consecutive growth after it exited a rare recession. The Q4FY21 GDP data released by the National Statistics Office (NSO) is in line with estimates released by multiple ratings agencies earlier.

In the corresponding period of 2019-20, the GDP growth was 3.1 per cent. The improvement in March quarter GDP suggests that the country’s economy recovered rapidly after registering negative growth for the first two quarters of FY21.

It may be noted that the Indian economy started recovering quickly from the third quarter of FY21 (December quarter) as restrictions were eased; the festive sales also contributed to the 0.4 per cent growth in the third quarter of FY21 after contracting 23.9 per cent in the first quarter and 7.5 per cent in the second quarter.

The economy continued to improve further during the January-March quarter with key indicators bouncing back, including GST collections, employment and demand.

The government has also released provisional full-year GDP data for FY21. The full-year GDP growth has been revised to -7.3 per cent, which is an improvement over the 8 per cent contraction expected earlier. In comparison, the 2019-20 GDP was 4 per cent.

However, many economists say that the March quarter GDP numbers will have little implication on the current economic growth trajectory as the second wave has disrupted recovery momentum again.

SECOND WAVE HURDLE

While ratings agencies had earlier projected India’s economy to register double-digit growth in FY22, the second wave of the pandemic and subsequent local lockdowns have led to downward revisions in growth estimates.

Most economists suggest that the worst impact of the second wave will be felt during the first quarter of FY22.

It is worth mentioning that Moody’s has lowered its original FY22 growth forecast for India to 9.3 per cent, while Barclays has cut its growth estimate for the country to 9.2 per cent.

While India has the possibility of registered double-digit growth on a lower base in FY22, experts indicate that it will depend on key factors such as demand revival and reopening key economic activities.