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GDP growth momentum affected by 2nd Covid wave: CEA KV Subramanian

Subramanian hoped that the year 2021-22 will be better than the year gone by. He said food grains production is expected to be at record levels in this year and eight core industries and index of industrial production have shown recovery to pre-pandemic levels during FY21

Chief Economic Adviser KV Subramanian Chief Economic Adviser KV Subramanian

Chief Economic Adviser KV Subramanian on Monday said the momentum of GDP growth has been affected by the second Covid-19 wave, but assured that its overall economic impact is unlikely to be very large. Indian economy grew 1.6 per cent in January-March quarter of financial year 2020-21, while full-year GDP shrunk by 7.3 per cent, the worst performance in the last 40 years.

Subramanian hoped that the year 2021-22 will be better than the year gone by. He said food grains production is expected to be at record levels in this year and coming year, given the normal monsoon that has been predicted by the Indian Meteorological Department. "This is reflected both in cereals (rice and wheat) and pulses. The demand in rural India has been resilient," he added.

He said MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) provided significant rural employment in 2020-2021. "There is a significantly lower level of demand for work in May, compared to the same period last year," he said.

He said eight core industries and index of industrial production, which shows performance by core industries, have shown recovery to pre-pandemic levels during FY21. The output of eight core industries grew 56.1 per cent year-on-year (YoY) in April on a low-base effect as industrial production was very low in the year-ago month because of a nationwide lockdown.

However, the industrial output declined 15.1 per cent as compared to March 2021 due to the emergence of the second wave of COVID-19 pandemic, with all eight industries registering a decline in output.  

Subramanian said GST collections registered another record high in April. "Since September, GST collections have been doing very well compared to the previous year."

Also read: India's GDP contracts 7.3% in FY21; grows at 1.6% in Q4

Also read: Eight core industries' output grows 56.1% in April on low-base effect

Also read: Covid-19 impact: Q3 GDP revised to 0.5% from 0.4%