IGI Logo

Below are Perspective on today’s GDP Numbers  by Ms. Rajani Sinha, Chief Economist & National Director - Research, Knight Frank India

Before we got hit by the second wave of COVID 19, Indian Economy had been moving back to normalcy supported by strong pent-up demand and that’s getting reflected in the improvement in Q4 FY21 GVA data. There has been a healthy rebound in manufacturing and construction sector, though the YOY growth has also been supported by the low base of last year. The sharp discrepancy in the GDP and GVA growth number is mainly due to large one-time subsidy adjustment and is on expected lines.

The second wave of Covid 19 has had less adverse impact on the economy as the lockdown has been less stringent, localized and many businesses have adapted to the pandemic/lockdown. Having said that the secod wave of the pandemic has been more fatal and scarring for the households, and this will be reflected in their spending pattern. Moreover, the unorganized sector and MSME’s that are large contributors to the Indian economy, will find it extremely difficult to sustain two waves of the pandemic and the demand destruction in the last one and half years. India’s growth trajectory in the next few quarters will be strongly linked to the pace of vaccination and the time taken to control the pandemic. this would have direct bearing on business and consumer sentiments, which in turn will influence the consumption and investment scenario.

Above views are of the author and not of the website kindly read disclaimer