New Delhi: India has officially exited the technical recession phase that was brought about by the Covid-19 pandemic, as the country’s Q3FY21 GDP grew by 0.4 per cent, official data showed on Friday.
The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by 7.3 per cent from (-)24.4 per cent in the preceding quarter.
Though not comparable, the GDP had grown by 3.3 per cent in the corresponding quarter of FY2019-20.
On the other hand, the NSO has projected GDP to fall by 8 percent in 2020-21. In its first advance estimates released in January, it had projected a decrease of 7.7 per cent for the current fiscal year against a growth of four per cent in 2019-20. China’s economy grew by 6.5 percent in October-December 2020, which was 4.9 percent more than in July-September 2020.
Gross Domestic Product, abbreviated as GDP, is the total value of goods and services produced in a country. GDP is measured over specific time frames, such as a quarter or a year. GDP as an economic indicator is used worldwide to show the economic health of a country. For low-income or middle-income countries, high year-on-year GDP growth is essential to meet the growing needs of the population. The GDP growth rate is an essential indicator of the country’s economic development and progress. Besides measuring the health of the economy and helping the government in framing policies, the GDP growth rate numbers are also useful for investors in better decision-making related to investments.
There are four types of expenditures: consumption, investment, government purchases and net exports. Each of these expenditure types represent the market value of goods and services.
From where is the GDP data sourced?
For the calculation of GDP at factor cost, data is taken from eight sectors, namely agriculture; mining and quarrying; manufacturing; forestry and fishing; electricity and gas supply; construction, trade, hotel, transport and communication; financing, real estate and insurance; and business services and community, social and public services. For the calculation of expenditure-based GDP, all the spending incurred on final goods and services are added that include consumer spending, government spending, business investment spending, and net exports.
Industry organization PHDCCI said that the country’s GDP is expected to record a record increase in the third and fourth quarters of FY 2020-21. QETs are indicators of economic and business activity monitoring, supervised by PhDCCI. It said that economic and business indicators such as unemployment rate, stock market, GST collections, manufacturing PMI, forex reserves, railway freight, merchandise exports, exchange rate and passenger vehicle sales have shown positive sequential growth in January as compared with December 2020.
A report released by DBS Bank stated that GDP could fall by 6.8 percent during FY 2020-21. According to the bank’s report, in the last quarter (October – December) of the calendar year 2020, the GDP rate may come in positive range. According to the DBS report, GDP growth is estimated at 1.3 percent in the third quarter.