Indian economy contracts 7.3%, Q4 GDP grows 1.6%

The economy surged by 1.6 percent in the Q4 (January-March) of the financial year 2020-21 (Q4FY21), revealed the National Statistical Office (NSO)  data. Meanwhile, the gross domestic product (GDP) growth contracted 7.3 percent in FY21. 

In the first quarter, the Indian economy contracted 24.4 percent due to COVID-19 forced lockdown, and that heavily affected the manufacturing of essential goods and provision of essential services.

With ease in lockdown from June 8, the scenario remained bleak as several service sector industries were shut down.

Notably, the Indian economy was on its path to recovery from the third quarter of FY21 (December quarter) due to ease of restrictions. Meanwhile, the festive sales contributed to the 0.4 percent growth in the third quarter of FY21.

In 2020-21, the Indian economy contracted by 7.3 percent against a 4 percent expansion in 2019-20, showing the economic impact of the COVID-19 pandemic.

The NSO had projected a GDP contraction of 7.7 percent in 2020-21 in its first advance estimates of national accounts released in January this year.

The NSO, in its second revised estimates, had projected a contraction of 8 percent for 2020-21.

China has recorded an 18.3 percent growth in January-March 2021.