Economy grew 4.1% in fourth quarter of FY 22, slowest pace in a year

Updated on May 31, 2022 06:59 PM IST

Asia’s third-largest economy rebounded from a pandemic-induced recession to grow 8.7% in 2021-22, compared to a contraction of 6.6% in 2020-21, but this is a tad lower than 8.8% estimated in January, according to the latest data.

Among other sectors, mining and quarrying and construction grew 6.7% and 2% respectively, the National Statistical Office’s data released on Tuesday showed. (HT PHOTO.)
Among other sectors, mining and quarrying and construction grew 6.7% and 2% respectively, the National Statistical Office’s data released on Tuesday showed. (HT PHOTO.)

New Delhi: India’s economy grew 4.1% during the January-March period in real or inflation-adjusted terms, the slowest pace in a year, the National Statistical Office’s data released on Tuesday showed.

Asia’s third-largest economy rebounded from a pandemic-induced recession to grow 8.7% in 2021-22, compared to a contraction of 6.6% in 2020-21, but this is a tad lower than 8.8% estimated in January, according to the latest data.

The January-March period is the third straight quarter of slowing growth as India battles a globally synchronized outbreak of high inflation. The latest GDP estimates for the fourth quarter of fiscal year 2021-22 compares to a growth rate of 5.4% in the third quarter, 8.5% in the second quarter and 20.3% in the first quarter.

GDP is the widest measure of economic activity and represents the value of all goods and services produced in a given period.

Lower global growth is also weighing in on India, as the Black Sea conflict slows nascent recovery from the pandemic. The war has exacerbated supply disruptions and splintered international trade. Higher interest rates and global instability have spurred flight of capital from the country to safe havens of dollar-denominated assets.

Separate data released by the Controller General of Accounts on Tuesday showed the country’s fiscal deficit for 2021-22 stood at 6.71% of the gross domestic product (GDP), lower than 6.9% projected by the finance ministry in the revised Budget Estimates.

The fiscal deficit in absolute terms provisionally stood at 15,86,537 crore compared to the finance ministry’s February budget estimates of 15,91,089 crore or 6.9% of GDP.

“While both tax and non-tax revenue performance has been better than the FY22 (revised estimates), which in turn were higher than the FY22 (budget estimates), provisional tax and non-tax revenue were 3.13% and 10.92% higher than FY22 (revised estimates),” said Sunil Kumar Sinha, principal economist of India Ratings and Research.

Tuesday’s estimates showed that real (inflation-adjusted) GDP in FY22 is estimated to have reached a level of 147.36 lakh crore, against the first revised estimate of 135.58 lakh crore for the year 2020-21, released on January 31, 2022.

Nominal or inflation-unadjusted GDP is estimated to have grown to a level of 236.65 lakh crore, as against 198.01 lakh crore in 2020-21, a growth rate of 19.5%, the NSO said.

During the March quarter, agriculture grew at a robust 4.1%, while manufacturing declined 0.2%. Public administration, defence and other services, which represent government expenditure, expanded 7.7% during the March quarter. Among other sectors, mining and quarrying and construction grew 6.7% and 2% respectively, the data showed.

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  • ABOUT THE AUTHOR

    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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