GDP sparkling growth by base effect and Vaccination

GDP sparkling growth by base effect and Vaccination

Team Ambitiousbaba and AB are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is GDP sparkling growth by base effect and Vaccination.

The Indian economy likely to be grew by 8.3% in the second quarter of the current fiscal year as per the most of rating agencies and renowned economists. The estimate of GDP growth for the July-September quarter ranged from 6.5% to 9.9%.

Main reasons behind immediate growth:

The growth was served by a strong base effect from the year ago in which the economy compressed 7.4%, work up on the Covid-19 vaccination, more government spending and improved consumption. The country’s gross domestic product (GDP) widened 20.1% in the first quarter, magnified by the base effect of nearly 25% contraction a year ago.

Concerns behind this effect:
Some economists warned very strongly that the recovery might be easily broken and high global commodity prices, especially oil and domestic coal shortages, could act as a drag.

Income Uncertainty drooped
Official numbers for the quarter will be published at the month-end. Assumption with tracking of GDP for the July-September quarter at 9.9% on the back of a strong rebound in consumption activity post the Second wave (Delta wave) with strong export performance and manufacturing activity bestowing to the growth revival. But the Reserve Bank of India (RBI) Economic Activity Index proposed that real GDP grew 9.6% in the July-September period. The economy gradually opened in the quarter as the severe second wave of the pandemic slacked. High-frequency indicators such as industrial production, vehicle sales, exports, port cargo traffic, rail freight traffic, and goods and service tax (GST) e-way bills all pointed to growth in the second quarter.

ICRA, a renowned rating agency was expected that the economy to have grown 7.7% in the last quarter. It is also showing that there is growing evidence of a K-shaped recovery.

However, experts warned about hanging around income uncertainty being faced by households that are dependent on the less formal and contact-intensive parts of the economy.


The formal sector has performed well while the informal sector has contracted and is yet to recover. Inflationary pressures are impacting consumers’ purchasing power.

Question & Answer:

Q1. What is the GDP means?

Ans. GDP or gross domestic product is the standard measure of the value added created through the production of goods and services in a country.

Q2. What is the GDP rate in the period of July to September as per RBI?

Ans. 9.6%

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