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Higher fiscal spending pushes India's GDP for Q2FY22 above 8%, crosses pre-COVID level

The accelerated vaccination drive also played a role in this YoY rise as it brightened consumer sentiments.

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There is good news for the country on the economic front. Along with the better monsoon season, India's gross domestic product (GDP) growth rate has seen a jump in the second quarter. The country's GDP has been recorded at 8.4 percent on a year-on-year basis. The central government has released GDP figures for the second quarter in the financial year 2021-22. With this recovery, the GDP of the country has now crossed the pre-COVID-19 levels.

The acceleration in the GDP came as a result of higher central fiscal spending as well as consumption recovery and healthy monsoon season. Besides, pent-up demand, higher exports along with a rise in service activity amid further improvement in mobility supported the uptrend.

The accelerated vaccination drive also played a role in this YoY rise as it brightened consumer sentiments. On a YoY basis, India's GDP growth rate had fallen by 7.4 per cent during the corresponding period of the previous fiscal. On a sequential basis, the GDP growth rate during Q2FY22 was lower than the rise of 20.1 per cent recorded for Q1FY22.

India's GDP at constant 2011-12 prices has been estimated at Rs 35.73 lakh crore in Q2FY22, as against Rs 32.97 lakh crore in Q2FY21.

"GDP at Constant (2011-12) Prices in Q2 2021-22 is estimated at Rs 35.73 lakh crore, as against Rs 32.97 lakh crore in Q2 2020-21, showing a growth of 8.4 per cent as compared to 7.4 per cent contraction in Q2 2020-21," the National Statistical Office (NSO) said in its Q2FY22 GDP estimates.

"Quarterly GVA at Basic Prices at Constant (2011-12) Prices in Q2 2021-22 is estimated at Rs 32.89 lakh crore, as against Rs 30.32 lakh crore in Q2 2020-21, showing a growth of 8.5 per cent," it added.

The GVA includes taxes but excludes subsidies.

Notably, the government had imposed a nationwide lockdown last year to contain the corona pandemic. It had a profound effect on economic activities. In view of the second wave of the devastating epidemic in mid-April this year too, the states had imposed various restrictions for its prevention.

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