BENGALURU (Reuters) – India’s economy grew 3.1% in the January-March quarter compared with the same period last year, the slowest growth in at least eight years, official data showed on Friday, reflecting the partial impact of the COVID-19 pandemic.

The read-out for the March quarter was faster than the 2.1% forecast of analysts in a Reuters poll but was below a downwardly revised 4.1% growth rate for the previous quarter.

SAKSHI GUPTA, SENIOR ECONOMIST, HDFC BANK, GURUGRAM

“While the Q4 number is higher than our expectations, we expect it to be revised down in subsequent releases as the impact of the lockdown is adequately factored in. The CSO (Central Statistics Office) mentions that the data collection activity was affected due to the lockdown in March.

Going ahead, we expect GDP growth to contract by 4.8% in FY21, with a sharp drop of 21% in Q1. Supply disruptions and labour shortage issues are likely to linger on. 40% of India’s GDP comes from currently-identified red zones across states.

Overall, the economy is likely to operate below trend capacity for FY21. Therefore, the recovery process is likely to be a slow grind and we expect the catch up process to pre-COVID-19 levels to take longer than earlier expected.”

MADAN SABNAVIS, CHIEF ECONOMIST, CARE RATINGS, MUMBAI

“Core sector data was to reveal a negative growth rate in the region of over 30% in April which has now come in at -38.1%. While an across the board negative number was also expected, the fall of 22.8% in electricity is a reflection of the sharp decline in industrial production as the household consumption was higher than normal.

Yet due to the lockdown, industrial and commercial demand had fallen, which gets reflected here.

The fact that labour was in transit camps meant activity in mining got affected. Lower imports of crude oil due to demand coming down meant that refinery products was affected. Cement and steel had both fallen by over 80% each due to the shutdown across the country.

The lowest decline in production was fertilizers as production was on to a limited extent given the demand for the sowing of the next crop.

This picture would be replicated in May too though not to this extent. IIP growth, too, would be in a similar range most probably given the high weight of these industries in the index.”