India out of recession, economy returns to growth in Dec quarter: NSO

The Indian economy returned to growth in the December quarter, ending a recession induced by two successive quarters of economic contraction. The gross domestic product (GDP) grew by 0.4 per cent in the October-December 2020 period compared with the same period a year back, according to data released by the National Statistics Office (NSO).

The recovery, dubbed by the government as ‘V’ shaped, is expected to gather pace.

This growth compares with revised contractions of 24.4 per cent in April-June 2020 and 7.3 per cent in July-September. GDP had expanded by 3.3 per cent in October-December 2019.

While India has become one of the few major economies to post growth in the last quarter of 2020, the annual GDP estimate for the current fiscal has been revised to an 8 per cent contraction, deeper than an earlier estimate of minus 7.7 per cent.

China’s economy grew by 6.5 per cent in October-December 2020, faster than the 4.9 per cent growth in July-September 2020.

Commenting on the growth numbers, the finance ministry in a statement said real GDP growth has “returned the economy to the pre-pandemic times of positive growth rates.”

“It is also a reflection of a further strengthening of V-shaped recovery that began in Q2 of 2020-21 after a large GDP contraction in Q1 followed one of the most stringent lockdown imposed by government relative to other countries,” it said.

Stating that the V-shaped recovery has been driven by rebounds in private consumption and investments, the ministry said the initial policy choice of “lives over livelihoods” succeeded by “lives as well as livelihoods” is now bearing positive results.

Agriculture, a bright spot through the pandemic, grew 3.9 per cent in October-December while manufacturing expanded 1.6 per cent as the economy reopened after a harsh lockdown.

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