While India’s economy recovered better than expected in the September quarter, the Gross Domestic Product (GDP) still contracted by 7.5 per cent.

The economy slumped at a rate of 23.9 per cent, making a record, in the first quarter of the 2020-21 fiscal (April 2020 to March 2021) in view of the Covid-induced lockdown, and the growth from there has held out hopes for further improvement on better consumer demand.

The official data released on Friday has however confirmed that India has entered its first technical recession, as two consecutive quarters witnessed GDP contraction.

But based on records going back to 1996, a sharp recovery held out hopes for the economy turning around before the end of the fiscal year.

According to the data, the economy has picked up as a result of the country’s gradual opening up since June.

Manufacturing clocked a surprise 0.6 per cent growth in July-September after it had shrunk by a massive 39 per cent in the preceding quarter.

While trade and service industries faced a contraction of 15.6 per cent, the agriculture sector grew by 3.4 per cent.

Public spending was down 12 per cent.

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.

Reserve Bank of India (RBI) governor Shaktikanta Das said on Thursday that the country’s economy has recovered stronger than what was expected from the preliminary impact of the Covid-19 pandemic.

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, which have tapered off to half of its peak of more than 97,000 infections a day in mid-September.