The union finance ministry on Friday said India's most stringent lockdown enforced in the April-June quarter was the reason behind country's GDP contraction at 23.9 percent.

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"India, too, is witnessing a sharp V-shaped recovery. The V-shaped pattern of recovery is seen in the following high-frequency indicators: auto sales, tractor sales, fertilizer sales, railway freight traffic, steel consumption and production, cement production, power consumption, e-way bills, GST revenue collection, daily toll collections on highways, retail financial transactions, manufacturing PMI, performance of core industries, capital inflows and exports," the finance ministry said in its Monthly Economic Report for August.

India’s manufacturing purchasing managers' index (PMI), at 52.2, has moved into expansionary zone in August for the first time since the lockdown, presenting much required recovery prospects for the manufacturing sector.

Since May, agriculture has persistently been the brightest spot in the revival of growth. Industrial production is showing definite signs of recovery with year-on-year (YoY) growth in eight core industries output showing a smaller contraction in July than in June, the report said.

The ministry said consumption is picking up with passenger vehicle sales rising to their highest level at 1.83 lakh in July as compared to 1.43 lakh in March, "Some revival in rural demand is also seen in growing sales of small cars, two-wheelers and sports utility vehicles and fertilizers. Increase in registrations for commercial and agricultural tractors from 52,362 in March to 66,061 in August is further indicative of strengthening rural demand."

"Growth in activity since the April-June quarter is further evident in the railway freight traffic of 95.2 million tonne in July, closing on to its previous year level of 99.7 million tonne. In the first twenty-days of August, railway freight volume at 60.38 million tonne has now crossed its previous year level of 56.60 million tonnes," the report said.

"Also creeping up as India unlocks are railway passenger bookings from -7.92 million in April (cancellation of bookings) to 14.62 million in July and domestic aviation passengers from 2.8 lakh in May to 21.1 lakh in July. Steel production at 74.02 lakh tonnes and cement production at 242.47 lakh tonnes in July, as compared to 86.13 lakh tonnes and 280.2 lakh tonnes respectively in the corresponding month of the previous year suggest revival of construction activity," it added.

The report said power consumption is quickly reverting to the last year's baseline, reaching 97 percent of corresponding previous year levels and crossing pre-COVID (February) levels in August, 2020.

"Sustained impetus in E-way bills generated is reflected in their value at Rs 13.8 lakh crore in August, reaching 97.2 percent of corresponding month of the previous year. E-way bills are a strong and leading indicator of revenue collections, supply chain corrections and logistics growth, and thus their significant growth augurs well for early resumption of economic normalcy," the report added.