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GDP grew 8.7% in 2021-22, lower than official estimates

India’s gross domestic product (GDP) grew 8.7% in 2021-22, a tad lower than the 8.9% officially estimated earlier, with growth slipping to 4.1% in the last quarter from 5.4% in the third quarter, as per provisional national income estimates released on May 31, 2022.

Output from India’s eight core sectors grew at 8.4% in April 2022, the fastest pace in six months, with crude oil and steel the only sectors to record a marginal decline in production compared to April 2021.
Labourers rest on a hot day in Lucknow on May 31, 2022. India’s economic growth, hit by pandemic curbs and price increases, slowed to 4.1% in the January-March quarter, according to figures released on May 31, 2022 by the government.

The Gross Value-Added (GVA) in the economy is estimated to have grown 8.1% in 2021-22, slightly lower than the 8.3% projected by the National Statistical Office (NSO) earlier. India’s GDP had shrunk 6.6% in 2020-21, while the GVA had fallen 4.8% that year amid the COVID-19 pandemic lockdowns.

GVA from the Agriculture and Financial, Real Estate & Professional Services sectors, the only two sectors that clocked GVA growth in 2020-21, grew by 3% and 4.2% in 2021-22, compared to 3.3% and 2.2% in the previous year, respectively.

Five major segments of economic activity recorded GVA growth of about 10% or more in the year gone by, compared to sharp contractions in 2020-21, led by Public Administration, Defence & Other Services, whose GVA rose 12.6% from 5.5% a year ago. GVA from Mining and Quarrying as well as Construction, which had contracted 8.6% and 7.3% in 2020-21, bounced back to clock 11.5% growth in 2021-22.

GVA from Trade, Hotels, Transport, Communication & Services related to Broadcasting, grew 11.1% from a steep 20.2% fall in 2020-21, while Manufacturing GVA rose 9.9% from a 0.6% drop in the previous year.

The contact-intensive segment of Trade, Hotels, Transport, Communication & services related to Broadcasting is now the only sector to continue to languish below pre-pandemic levels, ending 2021-22 still 11.3% off 2019-20 GVA levels. Electricity, Gas, Water Supply & Other Utility Services’ GVA grew 7.5% from a 3.6% fall in 2020-21.

Overall GVA growth slowed to 3.9% in the January to March 2022 quarter, from 4.7% in the previous quarter. Worryingly, Manufacturing sector output shrank 0.2% compared to the same quarter of 2021 – the first contraction in factories’ output since the massive 31.5% fall in the first quarter of 2020-21 amid strict national lockdowns.