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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.

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