New Delhi: There is good news but still not much to cheer. A pick-up in the manufacturing sector helped India's economy logging a lower contraction of 7.5 per cent in September. The gross domestic product (GDP) had contracted by a record 23.9 per cent in the first quarter of the 2020-21 fiscal (April 2020 to March 2021) as the coronavirus lockdown pummelled economic activity.

Manufacturing clocked a surprise 0.6 per cent growth in July-September. It had shrunk by a massive 39 per cent in the preceding quarter. The GDP contraction of 7.5 per cent in July-September compares with a growth of 4.4 per cent in the same quarter last year.

China's economy grew by 4.9 per cent in July-September this year, faster than the 3.2 per cent growth in April-June 2020.

Reserve Bank of India (RBI) Governor Shaktikanta Das had on Thursday stated that the recovery from the lockdown has been stronger than expected and the economy could show growth in the fourth quarter. The improvement in the economy came ahead of next week's interest rate decision by the RBI and coincides with a drop in India's daily virus cases.

However, the Union government's fiscal deficit further widened to Rs 9.53 lakh crore, which is nearly 120 per cent of the annual budget estimate, at the end of October of the current financial year, according to official data released on Friday. The deficit widened mainly on account of poor revenue realisation.

In absolute terms, the fiscal deficit stood at Rs 9,53,154 crore at October-end, which is 119.7 per cent of the annual budget estimates, as per the data released by the Controller General of Accounts (CGA). In the first seven months of 2019-20, the deficit was at 102.4 per cent of the annual target. /BI/