India exits recession, economy returns to growth in December quarter

India’s economy returned to growth in the December quarter, ending a recession induced by two successive quarters of economic contraction, and the recovery, which the the government termed as ‘V’ shaped, is expected to gather pace.

The Gross Domestic Product (GDP) grew 0.4 per cent in the October-December 2020 period compared with the same period a year back, data released by the National Statistics Office on Friday showed.

This growth compares with revised contractions of 24.4 per cent in April-June 2020 and 7.3 per cent in July-September. GDP had expanded by 3.3 per cent in October-December 2019.

While India has become one of the few major economies to post growth in the last quarter of 2020, the annual GDP estimate for the fiscal year ending March 31 has been revised to an 8 per cent contraction, deeper than an earlier estimate of (-) 7.7 per cent.

Commenting on the growth numbers, the finance ministry in a statement said real GDP growth has “returned the economy to the pre-pandemic times of positive growth rates.” “It is also a reflection of a further strengthening of V-shaped recovery that began in Q2 of 2020-21 after a large GDP contraction in Q1 followed one of the most stringent lockdown imposed by government relative to other countries,” it said.