India’s GDP growth accelerates to 20.1% in Q1 FY22

According to the data of Ministry of Statistics & Programme Implementation, economic growth of India accelerated to a record high in the quarter through June 2021.

Highlights

  • It reflects a very weak base in 2020, rebound in consumer spending, and improved manufacturing amidst the second wave of Covid cases.
  • As per data, the Gross domestic product has increased to 20.1% in the three-month period as compared to contraction of 24.4% in the same quarter in 2020.
  • GDP at Constant (2011-12) price in Q1 of 2021-22 was Rs 32.38 lakh crore as compared to Rs 26.95 lakh crore in Q1 of 2020-21.
  • Quarterly GVA at Basic Price at Constant (2011-12) Prices for Q1 of 2021-22 was Rs 30.48 lakh crore as compared to Rs 25.66 lakh crore in Q1 of 2020-21 reflecting a growth of 18.8%.
  • This is India’s fastest growth since the quarterly data started being released.
  • This growth is bit slower than the projection of Reserve Bank of India (21.4%).

Gross Domestic Product (GDP)

Market value of all final goods and services that are produced within an economy is called as Gross Domestic Product. It is calculated in two ways:

  1. Nominal GDP– GDP at the current market prices is called as Nominal GDP. GDP is calculated in accordance with the market prices for the year for which the GDP is calculated.
  2. Real GDP– GDP at base year prices is called as real GDP. It is calculated in accordance with the market prices in the base year. It also negates the inflation in goods and services.

In case of high rate of inflation, nominal GDP will be higher than the real GDP. But in case of deflation, real GDP will be e higher than the nominal GDP.

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