The finance ministry on Thursday said the GDP estimates suggest a continued resurgence in economic activity in second half of the current fiscal and point at post-lockdown sustained V-shaped recovery.
The ministry was commenting on the first advanced estimates (AE) of the national income released by the National Statistical Office on Thursday, which projected 7.7 per cent contraction in GDP for the current fiscal year.
"The AE of 2020-21 reflect continued resurgence in economic activity in Q3 and Q4 – which would enable the Indian economy to end the year with a contraction of 7.7 per cent," it said in a statement.
The continuous quarter-on-quarter growth endorses the strength of economic fundamentals of the country to sustain a post-lockdown V-shaped recovery, it added.
It further said the movement of various high frequency indicators in recent months, points towards broad based nature of resurgence of economic activity.
"The relatively more manageable pandemic situation in the country as compared to advanced nations has further added momentum to the economic recovery," the ministry added.
On the demand side, it said real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8 per cent.
On the supply side, agriculture is estimated to register a growth of 3.4 per cent against 4 per cent as per the provisional estimate of 2019-20.
In the manufacturing sector, electricity sector is estimated to register a growth of 2.7 per cent, the data showed.
The pandemic and associated public health measures have adversely affected the contact-sensitive services sector where trade, hotels, transport and communication are estimated to contract by 21.4 per cent in 2020-21.
The ministry further said as two vaccines get emergency use approval in India, the government is undertaking preparations of a mass mega vaccination drive.
However, while the impending vaccination is drawing closer, continued observation of “covid-appropriate” behaviour, caution and surveillance is crucial.