Most analysts say that the GDP numbers are much better than expected, especially the gross value added.
"QFY21 real GVA grew 3.7% YoY, similar to our forecast of 3.9% but much higher than the market consensus of 2.6%. Because of massive subsidy payments, real GDP growth was 1.6% YoY, better than our/market forecast of 0.6%/1%. It implies a fall of 6.2%/7.3% in real GVA/GDP in FY21.
Within GVA, while agri, M&Q & PADS grew slower than our expectations, slower fall in trade, hotels, transport & communication offset the former. Industrial growth was broadly in line with expectations," says Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services Ltd.
Mr. Ram Raheja, Director, S Raheja Realty says that the slight pick-up in GDP data would boost sentiments.
"The slight pickup in the GDP amidst COVID and lockdown is likely to boost sentiments. The forecast of the future GDP states it may elevate better than the previous quarters. The growth rate swinging back in the positive territory is in line with most estimates, supported by high government spending, reform measures, and progressive unlocking.
The improvement in the last two quarters does show some bright picture with the government's focus on improving infrastructure, the construction segment has shown phenomenal improvement. Going forward the steps taken to accelerate the vaccination drive will have major impact on the easing of lockdown and in turn the economy."
Most analysts believe that the numbers were largely a pleasant surprise.
"The economic growth rate for January-March quarter as well as full year FY21 is a pleasant surprise. We have seen positive economic growth for two consecutive quarters. Statistically, the growth rate for FY21 is negative but it is way better than most estimates. The government initiatives provided support to agriculture and manufacturing segment, but the hotel and tourism sector continued to witness contraction due to strict lockdown," says Nish Bhatt, Founder & CEO, Millwood Kane International - an Investment consulting firm.