Context : GDP Growth Projections: India’s GDP is expected to grow at 6.4% in FY 2024-25, the lowest in four years, down from 8.2% in FY 2023-24 (National Statistics Office’s advance estimates).
Relevance : GS 3(Economic Development )
Economic Recovery: The economy grew by 6% in the first half of the current financial year, with a projected 6.8% growth in the second half to meet the 6.4% full-year estimate.
Sector Performance:
- Agriculture: Growth expected at 3.8%, up from 1.4% in FY 2023-24.
- Public Administration, Defence, and Other Services: Expected to grow by 9.1%, a rise from 7.8% in FY 2023-24.
- Manufacturing: Expected to slow down with a growth rate of 5.3%, down from 9.9% last year.
- Mining and Quarrying: Growth forecast at 2.9%, a decrease from 7.1% in the previous year.
Investment Concerns: Gross Fixed Capital Formation (GFCF), an indicator of fresh investments, is projected to grow by just 6.4%, compared to 9% in 2023-24.
GDP Value: The real GDP for FY 2024-25 is estimated to reach ₹184.88 lakh crore, compared to ₹173.82 lakh crore in FY 2023-24.
Budget Implications: The revised growth projection indicates that reviving economic growth above 7% will be a key challenge for the 2025-26 Union Budget.
RBI and Finance Ministry Projections: The Reserve Bank of India reduced its growth forecast to 6.6% from 7.2%, while the Finance Ministry revised its range for GDP growth down to around 6.5%.
