1 The base effect is over
Two back-to-back disruptions because of the pandemic – the first was because of a 68-day long nation-wide lockdown which started on March 25, 2020 and the other, due to the second wave of the Covid-19 pandemic which peaked in May 2021 – have introduced a complicated base effect in the quarterly GDP numbers.
The waning of base effect is the biggest reason behind the large moderation in GDP numbers between the June and September quarters this year. Having said this, it needs to be acknowledged that almost all institutional and private forecasters have made a downward revision to their growth forecasts for India’s GDP growth.
Even MPC, which was spot on in its GDP projection for the September quarter, expects growth in the December 2022 and March 2023 quarters to be just 4.6%.