IGI Logo

Below is perspective on the GDP data By Dr. M Govinda Rao, Chief Economic Adviser at Brickwork Ratings

“The second quarter 2021-22 GDP estimate released by the Ministry of Statistics and Programme Implementation at 8.4% is quite close to the BWR projection of 8.3%. An important contributor to the growth has been the sharp increase in public administration, defence and other services which recorded a growth of 17.4% as compared to the contraction of 9.2% in the second quarter last year. This was mainly due to the sharp increase in public expenditures in the second quarter after conservative spending in the first quarter, as seen by the increase of 8.5% in government consumption expenditures.  While the overall growth even in contact intensive sector like trade, hotels, transport, storage and communication at 8.4% is impressive, the growth in the manufacturing sector art 5.5% is a bit disappointing.  On the expenditure components of GDP, increase in gross fixed capital formation at 11.1% bodes well for the future. As mentioned above, Government consumption too has registered a growth of 8.5%.  On the whole, the Q2 estimate shows that the economic recovery is gathering momentum and is likely to grow at 10–10.5% during the year 2021-22 as we had predicted earlier.”

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