September 1, 2021
The rebound in consumer spending despite the second wave of the pandemic is believed to be the major reason for the growth.
Retail, auto sales, farm output, construction and exports have also witnessed a rebound since June.
The centre’s GST collection rose to over US$ 13.68 billion in July, along with a rise in the manufacturing index.
The RBI and the July edition of IMF’s World Economic Outlook have predicted that India would grow at a pace of 9.5 percent in 2021.
At a record high to 20.1 percent, India’s gross domestic product (GDP) rose to US$ 443 billion in Q1 of 2021-22, according to an official press release by the Ministry of Statistic and Programme Implementation. The rebound in consumer spending, despite the economic decline caused by the second wave of the COVID-19 pandemic, since the previous year which saw a weak base, is believed to be the reason for this growth. During the first wave of COVID-19, a nationwide lockdown was imposed to battle the spread of the virus, leading to a major decline in the quarterly GDP growth during that period which fell by 24.4 percent to US$ 368 billion. Additionally, retail, auto sales, farm output, construction and exports have also rebounded since the month of June. Power demand and labour participation rate rose by 0.1 percent and 0.8 percent since the previous week, and the BSE sensex crossed the 57, 000 milestone for the first time, while the 30-share index gained over 4,000 points in August
July saw the centre’s GST collection soar to over US$ 13.68 billion, along with a jump in the manufacturing index. Speaking to Reuters, Prithviraj Srinivas, chief economist at Axis Capital, mentioned that the future has a much lower level of risk to economic recovery brought by COVID-19 owing to the rapid vaccination drives and low risk perception. Strong GDP growth in Q1FY21 is indicative of large favorable base effects post double digit contraction during the same period the previous year, according to Shashank Mendiratta, economist at IBM, speaking to TOI. He suggested continued policy support as a mandate for economic activity to return to normalcy, given the frequency indicators remaining mixed in their projections.
The chief economic advisor Krishnamurthy Subramanian mentioned that India was anticipating further growth as a result of structural reforms, government capex push and administering vaccination at an accelerated rate, along with strong indicators in the form of macroeconomic fundamentals and other metrics. The July edition of World Economic Outlook by the International Monetary Fund (IMF) predicted that 2021 would see India grow at a pace of 9.5 percent. Aligning with the same projection was the Reserve Bank of India, while also raising a warning against a possible third wave of COVID-19.