Back in the black

1 min read . Updated: 28 Feb 2021, 11:04 PM IST Livemin

GDP growth is back in the black after its 24.4% and 7.3% drops in the first two quarters

Not all were certain if India’s economy could exit its covid-caused recession, defined as two successive quarters of negative growth, as early as the third quarter of 2020-21. But the statistics ministry on Friday reported that gross domestic product (GDP) rose 0.4% from a year earlier in the three months to December. With this, GDP growth is back in the black after its 24.4% and 7.3% drops in the first two quarters.

That it achieved this so fast validates the view that commercial activity is normalizing. Other indicators had also shown sufficient buoyancy to suggest as much. Purchasing managers’ index readings, for instance, or car sales. Most production lines disrupted by the lockdown had been restored by the third quarter, which also saw the country’s corona curve slide after its mid-September peak. Now, with the Centre’s loosening of its fiscal strings to spend on infrastructure and other such productive plans, our much-awaited V-shaped recovery could get underway. A recent rise in covid cases does pose risks, but for now, these seem to be in check. Let’s keep it that way. Our economy needs a big bounce-up in 2021-22 just to get back to its 2019-20 size.