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India's economic growth rate likely to slip to four-year low of 6.4% in 2024-25

08 Jan 2025 Evaluate

The National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) in its the First Advance Estimates of Annual Gross Domestic Product (GDP) for the Financial Year (FY) 2024-25 has showed that India's economic growth rate is estimated to slip to a four-year low of 6.4 per cent in 2024-25, mainly on account of poor showing by the manufacturing and services sector. The gross domestic product (GDP) rate of 6.4 per cent will be the lowest since the Covid year (2020-21) when the country witnessed a negative growth of 5.8 per cent. It was 9.7 per cent in 2021-22; 7 per cent in 2022-23 and 8.2 per cent in the last fiscal ended in March 2024.

The estimate is lower than the 6.6 per cent projected by the Reserve Bank in December 2024. It is also a tad lower than the finance ministry's initial projection of 6.5-7 per cent. The advance estimates will be used in preparation for the Union Budget to be presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1. The economic growth slowed to a seven-quarter low of 5.4 per cent during the July-September period. It was 6.7 per cent in the first quarter (April-June).

NSO said the manufacturing sector output is expected to decelerate to 5.3 per cent from a high of 9.9 per cent recorded in the previous fiscal. The services sector, comprising trade, hotels, transport and communications, is estimated to expand at 5.8 per cent against 6.4 per cent in 2023-24. On the other hand, the farm sector is estimated to record a growth of 3.8 per cent in the current fiscal, up from 1.4 per cent in 2023-24.

According to the data, nominal GDP (GDP at current prices) is estimated to attain a level of Rs 324.11 lakh crore in 2024-25 compared to Rs 295.36 lakh crore in 2023-24, showing a growth rate of 9.7 per cent. Further, the nominal Gross Value Added (GVA) is estimated to attain a level of Rs 292.64 lakh crore in 2024-25 against Rs 267.62 lakh crore in 2023-24, showing a growth rate of 9.3 per cent. 

Private Final Consumption Expenditure (PFCE) at constant prices has witnessed a growth rate of 7.3 per cent during 2024-25 over the growth rate of 4 per cent in the previous financial year. Government Final Consumption Expenditure (GFCE) at Constant Prices has rebounded to a growth rate of 4.1 per cent compared to the growth rate of 2.5 per cent in the previous fiscal. NSO also said the per capita income (at current prices) is estimated to increase by 8.7 per cent to Rs 2,00,162 per annum. It was Rs 1,84,205 in the preceding fiscal.


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