NEW DELHI, Jan 7: The economic growth rate of India is projected to decline to a four-year low of 6.4 per cent for the fiscal year 2024-25, primarily due to underperformance in the manufacturing and services sectors, as per government data published on Tuesday.
This anticipated GDP growth rate of 6.4 per cent marks the lowest level since the financial year impacted by COVID-19 (2020-21), when the economy contracted by 5.8 per cent. The growth rates were recorded at 9.7 per cent in 2021-22, 7 per cent in 2022-23, and 8.2 per cent for the fiscal year ended March 2024.
The first advance estimates of National Income for 2024-25, released by the National Statistics Office (NSO), fall short of the Reserve Bank’s projection of 6.6 per cent made in December 2024. Furthermore, it is slightly below the finance ministry’s initial forecast of 6.5-7 per cent.
These advance estimates will inform the preparation of the Union Budget to be presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1.
According to NSO, output from the manufacturing sector is expected to slow down to 5.3 per cent, a significant decrease from the 9.9 per cent recorded in the previous fiscal year, based on the first advance estimates of National Income for 2024-25.
The services sector, which encompasses trade, hotels, transportation, and communications, is predicted to grow at 5.8 per cent, down from 6.4 per cent in 2023-24.
Conversely, the agricultural sector is estimated to achieve a growth rate of 3.8 per cent this fiscal, an increase from 1.4 per cent in 2023-24.
“Real GDP is projected to rise by 6.4 per cent in FY 2024-25, compared to the 8.2 per cent growth rate determined in the Provisional Estimate (PE) for FY 2023-24,” stated NSO.
The nominal GDP is expected to show a growth of 9.7 per cent in 2024-25, compared to a growth rate of 9.6 per cent in 2023-24.
According to the estimates, the nominal GDP (GDP at current prices) is set to reach Rs 324.11 lakh crore in the year 2024-25, rising from Rs 295.36 lakh crore in 2023-24, reflecting a growth rate of 9.7 per cent.
The overall size of the economy is anticipated to be USD 3.8 trillion (@ Rs 85.7/USD) for 2024-25 based on current estimates.
Additionally, nominal Gross Value Added (GVA) is projected to reach Rs 292.64 lakh crore in 2024-25, up from Rs 267.62 lakh crore in 2023-24, indicating a growth rate of 9.3 per cent.
Private Final Consumption Expenditure (PFCE) at constant prices has seen a growth rate of 7.3 per cent in 2024-25, compared to a 4 per cent growth rate in the previous fiscal year.
Government Final Consumption Expenditure (GFCE) at constant prices has bounced back with a growth rate of 4.1 per cent, up from the 2.5 per cent recorded the previous fiscal year. (PTI)
