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India GDP Data: Four Year Low! India's Growth Estimated to Drop to 6.4% in FY 2024-25

India GDP Data: India’s economic growth rate is projected to decline to a four-year low of 6.4% in the financial year 2024-25, as per the first advance estimates of National Income released by the National Statistics Office (NSO) on Tuesday.

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Neha Kumari
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India GDP Growth

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India’s economic growth rate is projected to decline to a four-year low of 6.4% in the financial year 2024-25, as per the first advance estimates of National Income released by the National Statistics Office (NSO) on Tuesday. This slowdown is attributed primarily to weaker performances in the manufacturing and services sectors.

Lowest Growth Since COVID Year

The estimated 6.4% growth rate is the lowest since 2020-21, when the economy contracted by 5.8% due to the pandemic. In comparison, GDP growth was 9.7% in 2021-22, 7% in 2022-23, and 8.2% in 2023-24. This estimate is also lower than the Reserve Bank of India’s December projection of 6.6% and the finance ministry’s forecast of 6.5-7%.

Sectoral Performance Highlights

The manufacturing sector is expected to grow by 5.3% in 2024-25, a significant decline from the 9.9% growth recorded in the previous fiscal year. Similarly, the services sector, which includes trade, hotels, transport, and communications, is estimated to grow at 5.8%, down from 6.4% in 2023-24.

On a positive note, the agriculture sector is projected to grow by 3.8%, a notable improvement from the 1.4% growth seen last year.

Implications for the Union Budget

These estimates will play a critical role in shaping the Union Budget for 2024-25, which Finance Minister Nirmala Sitharaman will present on February 1.

Nominal GDP Growth and Economic Size

Nominal GDP is estimated to grow by 9.7% in 2024-25, reaching Rs 324.11 lakh crore, up from Rs 295.36 lakh crore in 2023-24. The size of the economy is expected to hit USD 3.8 trillion, based on the current exchange rate of Rs 85.7 per USD. Nominal Gross Value Added (GVA) is also expected to grow by 9.3%.

The data underscores the need for targeted policy measures to boost key sectors and sustain long-term economic growth.