Mumbai, Mar 3 (IANS): India's real gross value added (GVA) is likely to grow at 3-4 per cent on a year-on-year basis in the ongoing quarter of FY21 largely on the back of expected better growth during February and March.

A Motilal Oswal Financial Services report said that post the expected 3-4 per cent growth in the Q4, the overall contraction in real GVA for this fiscal would stand at 6.2 per cent.

"Overall, aggressive fiscal spending and relatively better farm activity seem to have driven up overall economic activity in the first month of 4QFY21. Additionally, as per early indicators, there are positive signs of sustained growth momentum," it said.

While daily e-way bill generation was at the highest-ever level of 2.3 million units, daily power generation was also up 4 per cent YoY in February 2021.

"With better growth expected over Feb-Mar'21 (partly supported by the base as well), we believe real GVA could grow 3-4 per cent YoY in 4QFY21, but contract 6.2 per cent YoY in FY21," it said.

The 'Ecoscope' report noted that Motilal Oswal's in-house Economic Activity Index (EAI) for India's real gross value-added (EAI-GVA) posted faster growth of 4.9 per cent YoY in January 21, against growth of 4.1 per cent YoY in December 2020 and 4.7 per cent in January 20.

"Faster growth in January 2021 was led by higher growth in the services sector and farm activity. On the other hand, growth in industrial activity moderated during the month," it said.

Additionally, while the services sector was driven by fiscal spending, expected decline in construction activity and slower growth in the manufacturing sector led to muted industrial growth in January 2021.