Improved sentiments, low base effect behind 8.4% GDP growth

The nation’s GDP grew 8.4% in the quarter ended September 2021, as economic activity recovered gradually from a virulent second wave of the COVID pandemic.

But primarily behind the increased numbers was the low base effect. In the second quarter of FY 2020-21, when the first wave of COVID was wreaking havoc on an unvaccinated global population, the Indian economy had contracted by over 7%.

In the latest quarter, business sentiments improved with a fall in COVID caseload and resultant easing of lockdowns. The rising vaccination rates also vastly brightened the picture.