India’s economy grew at a record pace of 20.1% in the April-June quarter of the current fiscal as the economy recovered from the second wave of the Covid pandemic while last year’s low base also helped. In the corresponding quarter of previous fiscal, India had posted the sharpest contraction on record of 24.4% due to the impact of one of the strictest lockdowns imposed to prevent the spread of Covid.

Since the April-June quarter of last year, the economy started recovering at a robust pace on the back of pent-up demand, but the second wave of the pandemic stalled the recovery process. The unlocking and government spending has helped revive the recovery.

Gross domestic product (GDP) growth numbers for Q1 were in-line with Street estimates as a Reuters poll had pegged it at 20% while the Reserve Bank of India (RBI) had estimated it to be 21.4%. 

Growth in the first quarter was led by manufacturing, mining and construction sectors, while the agriculture sector also lent strong support. The laggard was the services sector, which has been hit hard by the two consecutive waves of the pandemic and is yet to recover from the bruising impact.

Economists say in the second half of the year recovery will be broad-based unlike now where industry is leading the growth compared to services.