The National Statistical Office data has revealed that the Indian economy grew at a record pace of 20.1% in April-June 2021, as compared to the corresponding period last year.
- Last year, Gross domestic product (GDP) contracted 24.4% in the same period, when the national lockdown due to the Covid-19 pandemic had nearly halted all economic activities.
About Economic Recovery:
- The first quarter’s high growth rate, has come despite a brutal second wave of the pandemic which peaked in April-May 2021.
- The sharp increases were largely due to the low base (-24.4%) of the first quarter of 2020-21.
- This growth reaffirms the government’s prediction of an imminent V-shaped recovery made last year.
- However, despite phenomenal economic recovery, the GDP in the first quarter is still 9.2% lower than the GDP in the same period during the pre-Covid year 2019-20.
- Amongst sectors, manufacturing and construction imparted a significant push to the economy in April-June, growing 49.63% and 68.3% respectively, over April-June 2020.
- However, the services sector continued to lag.
- Sectors including ‘agriculture, forestry and fishing’ and ‘electricity, gas, water supply and other utility services’ are above the levels of the pre-Covid year of 2019-20.
V-shaped Economic Recovery:
- A V-shaped recovery is characterized by a quick and sustained recovery in measures of economic performance after a sharp economic decline.
- Such recoveries are generally spurred by a significant shift in economic activity caused by rapid readjustment of consumer demand and business investment spending.