Economy grows 20.1% in Q1

According to the data released by the National Statistical Office, the Indian economy grew at a record pace of 20.1 per cent in April-June 2021 compared with the corresponding period last year, when a national lockdown due to the Covid-19 pandemic had nearly halted all economic activities. The GDP had contracted 24.4 per cent in April-June 2020.
The first quarter’s high growth rate, however, has come despite a brutal second wave of the pandemic which peaked in April-May.
This is the fastest quarterly growth witnessed by India since such data began to be released in the mid-1990s.
The jump in GDP numbers is mainly due to a weak base last year and also a rebound in consumer spending during the quarter.

One of the major reasons for this phenomenal jump in GDP is the low base effect. That means the base year or month with which the figure is being compared.
For quarterly or annual GDP data, comparison is always made with the same quarter last year or growth over last year’s GDP.
The Q1 GDP growth of 20.1% per cent is, therefore, in comparison to that GDP data recorded in the same quarter last year.
When the pandemic struck in 2020, the government imposed a strict nationwide lockdown to curb the spread of the virus. This had a massive impact on the Q1 GDP growth which slumped by a record 24.4 per cent to Rs 26.95 lakh crore as compared to Rs 35.7 lakh crore reported in Q1 of 2019-20.
As for the period under consideration, the GDP figure stands at Rs 32.38 lakh crore, up 20.1 per cent from Rs 26.95 lakh crore reported in Q1 of 2020-21.
However, the GDP at Constant (2011-12) prices in Q1 of 2021-22 (Rs 32.38 lakh crore) is still 9.2% lower than the GDP in the same period during the pre-Covid year 2019-20.

Apart from the low base effect, there are other significant reasons too which suggest a recovery in the economy.
The GDP data shows that sectors including ‘agriculture, forestry and fishing’ and ‘electricity, gas, water supply and other utility services’ are above the levels of the pre-Covid year of 2019-20. Agriculture and electricity sectors have grown 8.21% and 3%, respectively, compared with April-June 2019-20.
Many sectors like retail, auto sales, farm output, construction and exports have picked up since June.

Today Current Affairs Upsc Exam Syllabus & Previous Yearpaper.