India's Q2 GDP grew by 8.4%, strengthening beliefs that the road to a complete economic rebound is just a few streets down.
With this, we have been in positive territory for four quarters straight, livening up hopes that growth will be north of 9.5% this fiscal. But then, the new virus variant Omicron is keeping the fear storm going creating unease and so all estimates are pretty much written in water.
According to the National Statistics Office's provisional estimates, nominal GDP printed at Rs 35.73 lakh crore in Q2, FY22 as against Rs 32.97 lakh crore a year ago. SBI Research noted that this is the highest growth across all economies. On a sequential basis, growth rate stood at 10.3%.
If the annual projections turn true, the national output will likely print at Rs 147.96 lakh crore in FY22, moderately higher than the pre-pandemic figure of Rs 145.7 lakh crore seen in FY20. Once we reach this threshold, it's only a matter of time for the economy to come up roses. Or so it was presumed. But all optimism of starting next year with a clean breast may be put on hold for now, despite emerging views that any potential third wave will knife its way only through the outer layers of the economy.
The eight broad metrics of growth are decidedly back to black in Q2.
Among them, mining and quarrying and public administration clocked double-digit growth over last year, but not so much on a sequential basis. And the good news ends pretty much here as other components including manufacturing, services, construction and electricity, which showed a stellar performance with growth rates ranging from 14-69% in Q1, are all down to single digits.
For instance, if manufacturing clocked 50% in Q1, it's down to a dismal 5.5%, perhaps indicating the strain due to the ongoing global supply chain crisis. Construction, which raked in a mighty 68.3%, settled for an unspeakable 7.5%. Ditto with services, which is down from 34.3% to 8.2%. Interestingly, agriculture neither gained, nor lost a jot printing at 4.5% sequentially.
On the expenditure side, the potting mix is being realigned with the three broad components -- investment, production and consumption. Government expenditure, which soldiered on since the pandemic began, saw its share decline sequentially, though it did grow over last year. Similarly, consumption picked up both sequentially and over the previous fiscal led by the boost from reopening and festive tailwinds. Investments too maintained momentum crossed-past pre-pandemic levels and should likely fare better from hereon should the projected 'capex mahatsov' jolt to life.