Encouraged by a lower-than-expected slide of 7.5% year-on-year in real GDP in the September quarter, chief economic adviser KV Subramanian on Friday spoke of an "upside potential" to the GDP estimates firmed up by the central bank and other agencies if the country doesn't go through a second wave of Covid-19.
According to data released by the National Statistical Office (NSO), India's gross domestic product (GDP) in Q2 FY21 at Constant (2011-12) prices was Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in the same period a year ago.
The latest data is a significant improvement over the unprecedented 23.9 per cent year-on-year contraction in April-June due to damage inflicted by the pandemic-induced lockdown.
"Prices in Q2 of 2020-21 is estimated at Rs 33.14 lakh crore, as against Rs 35.84 lakh crore in Q2 of 2019-20, showing a contraction of 7.5 per cent as compared to 4.4 per cent growth in Q2 2019-20", said the Ministry of Statistics and Programme Implementation in a statement. "Since the quarterly data of GDP is released with a lag of two months, we should look at these numbers in the rear-view mirror keeping in perspective that recent high-frequency data possibly suggest a quicker rebound ahead", says Majumdar.
Party leader Randeep Singh Surjewala asked the prime minister not to compare the data of the second quarter with the first quarter, but with last year's second quarter. However, the crucial services segments fell for the second quarter in a row.
Among the sub-sectors, trade, hotels, transport, and communication were the worst affected, declining at 15.6 per cent, followed by public administration and defence, where the value added contracted by 12.2 per cent.
The contraction of the economy eased off in the September quarter, helped by manufacturing and agriculture.
While imports of goods and services were down 16.4 per cent, exports were up by just 0.5 per cent. Low gross fixed capital formation contraction at only 7.3% despite down new projects, ongoing projects on hold, govt capex down is inexplicable. "Though the restrictions have been gradually lifted, there has been an impact on the economic activities". Consumption demand and investments which are necessary to propel the economy would continue to be tepid and is unlikely to see a noteworthy improvement during the course of the year.