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Agriculture and allied sectors remain bright spot of the economy

These sectors had recorded positive growth in Q1 of FY21 while other sectors nosedived due to strict lockdown in the country.

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New Delhi: Agriculture and allied sectors continue to shine bright with April-June FY22 GDP data showing that “agriculture, forest and fishery” sectors’ output grew by 4.5 per cent as compared to 3.5 per cent during the same period of the previous fiscal.

These sectors had recorded positive growth in Q1 of FY21 while other sectors nosedived due to strict lockdown in the country.

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“One sector which is standing out in a positive way is agriculture. Other sectors are not really standing out in a satisfactory way,” said NR Bhanumurthy, Vice Chancellor, Bengaluru Ambedkar School of Economics University on Tuesday.

“Agriculture and allied sectors were clocking positive growth last year and we have seen much more growth in these sectors this year,” he added.

The government final consumption expenditure (GFCE) decreased by 4.8 per cent to Rs 4.2 lakh crore in Q1 FY 2021-22 from Rs 4.4 lakh crore in Q1 FY 2020-21.

As per the NSO data, revenue expenditure (less interest payment and subsidies) fell 12.8 per cent compared to a positive growth of 33.7 per cent in the same quarter last year.

Riding on the low base, India’s April-June quarter (Q1FY22) GDP growth surged 20.1 per cent reflecting fast-paced economic recovery.
“GDP at constant (2011-12) prices in Q1 of 2021-22 is estimated at Rs 32.38 lakh crore, as against Rs 26.95 lakh crore in Q1 of 2020-21, showing a growth of 20.1 percent as compared to a contraction of 24.4 percent in Q1 2020-21,” according to National Statistical Office (NSO).
With this, more than 90.8 per cent of the Q1 output of 2019-20, the pre-pandemic year stands recovered.

On the national output still not reaching pre-pandemic level, Bhanumurthy, a country’s noted economist, said that the first quarter includes the severe second wave and hence 20.1 per cent growth is huge positive.

Quarterly gross value added (GVA) at constant (2011-12) prices for Q1 of 2021-22 is estimated at Rs 30.48 lakh crore, as against Rs 25.66 lakh crore in Q1 of 2020-21, showing a growth of 18.8 percent.

GDP is derived as the sum of the gross value added (GVA) at basic prices, plus all taxes on products, less all subsidies on products.
The quarterly estimates released by the NSO on Tuesday showed mining & quarrying growing 18.6 per cent year-on-year in the first quarter. Manufacturing GVA grew 49.6 per cent, as compared to a de-growth of (-) 36 per cent in the same period last year.

“At this juncture, there is a need to further fuel the drivers of household consumption and private investments to enhance the aggregate demand in the economy as it will have an accelerated effect on expansion of capital investments in the country,” said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.

He further said that the government should frontload the National Infra Pipeline expenditure as increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy.

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