Gross domestic product grew 0.4% in October-December compared with the same period a year earlier, data released by the National Statistics Office on Friday showed. That compared with revised contractions of 7.3% in July-September and 24.4% in April-June.
Analysts in a Reuters poll had forecast 0.5% growth in the third quarter of the fiscal year that ends on March 31.
India also revised annual GDP estimates for the fiscal year, predicting an 8.0% contraction, deeper than an earlier estimate of -7.7%.
Economists have raised their forecasts for the current fiscal year and 2021-22, expecting a pick-up in government spending, consumer demand and a resumption of most economic activities curtailed by the COVID-19 pandemic.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
“We expect the economy to reach pre-pandemic output levels by the end of calendar year 2021,” said Sakshi Gupta, senior economist at HDFC Bank, adding that the economy could grow 1.5% in the March quarter.
Sectors such as retail, airlines, hotels and hospitality are still reeling from the impact of the coronavirus pandemic.
Annual growth of 3.9% in the farm sector and 1.6% in manufacturing during the three months to December raised hopes of an early recovery as the government rolls out plans to distribute COVID-19 vaccines to India’s 1.4 billion people.
Prime Minister Narendra Modi’s government earlier this month launched plans to fund a huge vaccination drive, while outlining a slew of tax incentives to boost manufacturing.
The Reserve Bank of India (RBI), which has slashed its repo rate by a total of 115 basis points since March 2020 to cushion the economic shock of the pandemic, has projected growth of 10.5% in the fiscal year that starts in April.
The central bank left the repo rate unchanged at 4% earlier this month, saying the growth outlook had improved and inflation was expected to remain within the RBI’s targeted range over the next few quarters.
Some analysts warn however that a recent rise in crude oil prices and a surge of COVID-19 cases in parts of the country may pose risks to the nascent recovery.