Economy grows 20.1% in Q1

Economy grows 20.1% in Q1

Part of: GS Prelims and Mains GS-III Economy 

Context: India’s Gross Domestic Product (GDP) grew by 20.1% in the first quarter of 2021-22.

• In the corresponding quarter a year ago, the 24.4% contraction was recorded.
• However, economic activity still remained well below the pre-pandemic levels, due to the second wave of COVID-19.

Key takeaways

• Gross Value Added (GVA) in the economy (April to June) rose 18.8%, as per the National Statistical Office (NSO), from a 22.2% dip in the first quarter of 2020-21.
• Electricity, gas, water supply and other utility services was the only sector along with agriculture, forestry and fishing, to recover beyond the pre-pandemic levels of 2019-20.

What is the difference between GDP and GVA?

• Gross value added (GVA) is defined as the value of output less (minus) the value of intermediate consumption. 
• It is used to measure the output or contribution of a particular sector. 
• When such GVAs from all sectors (∑ GVA) are added together along with adding taxes and reducing subsidies,  we can get the GDP (at market price). 
• GVA thus shows the production contribution of a particular sector and GDP shows the production contribution of  the  economy.