India achieves full recovery in pre-pandemic output level in Q2 FY22, says FinMin

"The recovery was driven by a revival in services, full-recovery in manufacturing and sustained growth in agriculture sectors," the report said. The recovery suggests "kick-starting of the investment cycle, supported by surging vaccination coverage and efficient economic management activating the macro and micro drivers of growth," it said.

Exports and investment rose over 17 and 1.5 percent, respectively, over the pre-pandemic levels, driving economic recovery from the demand side. Private consumption emerged as the macro growth driver for the economy, rising from 88 percent in the first quarter to 96 percent in the second.

On the supply side, the manufacturing and construction sectors aided the agriculture sector in driving growth. Both manufacturing and construction sectors surpassed their pre-pandemic levels.

"Reassuringly, GVA in trade, hotel, and communication services sharply improved from pre-[andemic recovery rate of 70 percent in Q1 to 90 percent in Q2, to become another emerging growth driver of the economy as contact-based services overcame the fear of the pandemic," the report said.

The report said the recovery is expected to gain strength in the remaining quarters of the financial years. Over 19 of 22 high-frequency indicators (HFI) in September, October, and November 2021 crossed the pre-pandemic levels, as compared to the corresponding months in 2019.

However, the report said, the new variant of the coronavirus "may pose a fresh risk to the ongoing global recovery." Though it added, the variant is expected to be "less severe and more so with the increasing pace of vaccination in India," it said.