The economy snapped from recession and returned to growth in the October-December quarter after two successive quarters of contraction in growth. The gross domestic product (GDP) grew by 0.4 per cent in the third quarter, which is a sharp improvement from the de-growth of 23.9 per cent and 7.5 per cent in the previous two quarters. India is one of the few economies that witnessed positive year-on-year growth in the October-December period. The gains in the economy in the third quarter were driven by growth in sectors such as agriculture, manufacturing, electricity, gas, water and utility services, construction and financial, real estate, and professional services. (Also Read: India Exits Recession With 0.4% Quarterly Growth )
The agriculture sector grew by 3.9 per cent in the third quarter of the financial year, compared to three per cent growth in the year-ago period. The gradual unlocking of the economy with the steady decline in COVID-19 cases during the three-month period boosted consumption and activity across sectors.
The agriculture and industrial sector witnessed growth, while the contact intensive services sectors registered de-growth. The industrial sector witnessed a growth of 2.7 per cent supported by the growth in manufacturing (1.6 per cent), electricity, gas, water and utility services (7.3 per cent) and construction (6.2 per cent).
The output of eight core infrastructure sectors grew 0.1 per cent in January 2021, compared to last year, according to government data. The infrastructure output, which comprises eight core sectors including coal, crude oil, and electricity, fell by 8.8 per cent during April-January period, against a growth rate of 0.8 per cent in the same period of the previous year. (Also Read: Infrastructure Output Of Core Sectors Up 0.1% In January 2021 )
Despite the improvements, the growth rates are significantly lower than those in the year-ago period. The real GDP growth in the third quarter of the current financial year is 0.4 per cent – notably lower than the 3.3 per cent growth in the corresponding quarter of the previous financial year.