Business Desk, ETV Bharat: India’s agricultural sector continued to be one of the fastest growing segments of the Indian economy for a second straight quarter even as overall gross domestic product (GDP) contracted 7.5% year-on-year during the July-September 2020 period.
According to the quarterly data released by the National Statistical Office (NSO) on Friday, the agriculture, forestry and fishing sector grew 3.4% year-on-year during Q2 – the same rate at which it grew in Q1.
A sharp rebound was seen in the manufacturing sector, which managed to post a marginal growth of 0.6% in Q2 compared with -39.3% in Q1.
A recovery in the manufacturing sector was anticipated as listed manufacturing firms also posted record profits for the September quarter, according to data shared by independent economic think tank Centre for Monitoring Indian Economy (CMIE) earlier this week.
However, key issues of labour shortage and supply disruptions continued to keep the growth rate muted in the manufacturing space.
India’s construction sector also contracted by a less severe margin during the second quarter. During Q1, the sector was the worst hit and had grown at a dismal rate of -50.3% due to a complete shutdown of activities after most of the workers fled cities. However, the sector has managed to close the gap in Q2 with -8.6% growth compared with a year ago.
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Trade, hotel and hospitality sector, transportation, and communication sectors -- the second biggest casualty of Covid-19 lockdown measures during Q1 – continued to have a tough second quarter as growth rate remained deep in negative at -15.6%. Though it was still better than the -47% growth seen in Q1 as the hospitality sector resumed activities after a decline in Covid cases in key states.
Interestingly, ‘Financial, Real Estate and Professional Services’ and ‘Public Administration, Defence and Other Services’ were the only two segments of the economy which contracted by a sharper rate in Q2 than in Q1.
The Financial and Real Estate sector collectively contracted -8.1% in Q2 compared with -5.3% in Q1. Similarly, stagnant government expenditure led to the public administration and defence segment contracting by -12.2% in Q2 compared with -10.3% in Q1.
Overall, of the 8 core sectors, four grew while four contracted during the second quarter. In contrast, in Q1, agriculture was the only segment to have grown compared with a year ago.
Meanwhile, real GDP registered a significant improvement in Q2 with a contraction of 7.5% over the corresponding quarter of previous year vis-a-vis contraction of 23.9% registered in Q1.
