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 during the October-December period 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 unlocking of the economy with the steady decline in COVID-19 cases during the three-month period boosted consumption and activity across sectors. 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.
The agriculture and industrial sector witnessed growth in the third quarter, 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 manufacturing sector output returned to growth after a gap of four quarters while that a construction turned positive after three quarters, reflective of the higher levels of activity in these segments with the unlocking process.