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Below are Perspective on GDP data from Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services

“4QFY21 real GVA grew 3.7% YoY, similar to our forecast of 3.9% but much higher than the market consensus of 2.6%. Because of massive subsidy payments, real GDP growth was 1.6% YoY, better than our/market forecast of 0.6%/1%. It implies a fall of 6.2%/7.3% in real GVA/GDP in FY21.

Within GVA, while agri, M&Q & PADS grew slower than our expectations, slower fall in trade, hotels, transport & communication offset the former. Industrial growth was broadly in line with expectations.

Within GDP, there was broad-based better than expected growth. Real consumption (led by government) grew 6.4% YoY, and real investments grew 13.8% last quarter. What more, nominal GDP grew 8.7% YoY in 4QFY21, same as that in 4QFY20.

As far as Apr'21 is concerned, core infrastructure index has declined 15% MoM, fiscal spending has declined and auto sales have also fallen sharply. Overall, as broadly expected, things are about to worsen in 1QFY22 though YoY data will look very great.

Lastly, excluding government consumption spending, real GDP actually moved into contraction territory (-1.1%) again in 4QFY21.

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