As the Indian economy gradually moves to normality after the crippling blows inflicted by the two waves of the Covid-19 pandemic, the country’s gross domestic product grew by 8.4% in the second quarter of the current fiscal. However, this growth comes on the back of a low base in the same period last year when the economy had contracted more than 7% amid the Covid-induced lockdowns and disruption of economic activity.
According togovernment data, agriculture grew 4.5% during the July-September quarter, compared with 3% in the same period last year. Manufacturing showed signs of recovery after it grew 5.5%, as against a contraction of 1.5% last year. Trade, hotels, Transport, Communication and broadcasting that was the worst hit during the second quarter last year with a contraction of 16%, grew 8.2% this year.
The unlocking of the economy and the widening vaccine cover in the country has helped spur the gross domestic product growth during this quarter. Private consumption has grown nearly 8.6% during the second quarter, thereby marking a revival of consumer sentiment. However, the absolute numbers are still lower than the figures in the same period during the pre-Covid year.
But the rising crude oil and the global commodity prices remain a cause of concern. This is already visible in the automotive sector where prices of passenger vehicles have risen 3-4 times this year as manufacturers tried to pass on the rising input costs to the customer.
On the other hand, rising inflation may force the Reserve Bank of India to roll back monetary stimulus, that has supported the recovery process.
After releasing the growth numbers, chief economic advisor K Subramanian said India is likely to witness double-digit growth this year. “Overall growth for the first half has been 13.7%. So, even a little more than 6% growth in the subsequent quarters should be able to deliver double-digit growth for this year,” he said.