India’s GDP grows at 20.1% in Q1FY22; here’s what it means

Anubhuti Sahay, Head of South Asia Economic Research (India) at Standard Chartered Bank said, the GVA number is slightly below her expectations and it shows that the non-farm sector has not done as well as expected.

"GDP has come pretty close to our estimate of 21 percent. It is slightly lower when it comes to GVA number. We were looking at GVA number of close to 20 percent but it has come at 18 percent. And that shows that the non-farm sector has not done as well as we expected. Farm sector growth at 4.5 percent has surprised us, we were looking at a growth of 3-3.5 percent. However the contact intensive sectors, especially the services sector was much more impacted than the industry growth is clear in this number."

Sameer Narang, Chief Economist at Bank of Baroda said, "We were anticipating a 20 percent kind of increase in the private final consumption expenditure. Even the government side as well given the multitude of lockdowns by different state governments, we did expect that the government spending on the revenues account would be far lower. However, what we see is that the government spending ties in quite well with the overall construction spending and that is where the majority of growth is also likely to come in the coming few quarters and years - where the government is actually looking at both monetisation as well as spending a lot in terms of building high-quality roads, improving the rail network. So all of those principal investments that are being tied up for infrastructure will be a key driver of growth in the coming quarters and years."

Pronab Sen, Former Chief Statistician said, "The numbers that have come in are a lot better than any of us had expected. I was expecting around 16 percent and what this suggests is that the second wave in terms of the pandemic was much worse than the first wave but the fact that there wasn't a nationwide lockdown seems to have helped the economy alone. What this is saying is the effect of the pandemic on the economy through its various channels is a lot less than the reaction we had to the pandemic. So this is good news and what it is saying is last year we overreacted."