However, the question remains: how sustainable is the recovery witnessed in the second quarter? Ind-Ra said a significant part of the impetus came from the festival and pent-up demand.
“Although the headwinds emanating from Covid-19 related challenges are unlikely to go away till mass vaccination becomes a reality, perhaps the economic agents and economic activities not only have learnt to live with it but also are adjusting swiftly to the post-Covid-19 world.”
Ind-Ra now expects 3Q FY21 GDP growth to come in at negative 0.8 per cent and 4Q FY21 GDP growth to turn positive at 0.3 per cent as against its earlier expectation it turning positive in 4Q FY22.
The agency expects FY22 growth to be 9.6 per cent, mainly due to the weak base of FY21.