New Delhi: The Indian economy is likely to grow at its slowest pace at 6.4 per cent in 2024-25, marking a four-year low and a sharp decline from the 8.2 per cent growth recorded in FY24. However, the projection is lower than the recent Reserve Bank of India’s estimate of 6.6 per cent for the current fiscal year ending March 2025, according to the first advance estimates released by the government on Tuesday. As per the National Statistics Office (NSO) data, 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 and 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 March 2024. 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 real GDP has been estimated to grow by 6.4 per cent in FY 2024-25 as compared to the growth rate of 8.2 per cent in the Provisional Estimate (PE) of GDP for FY 2023-24. However, the nominal GDP has witnessed a growth rate of 9.7 per cent in 2024-25 over the growth rate of 9.6 per cent in 2023-24. Nominal GDP or GDP at current prices is estimated to attain a level of Rs 324.11 lakh crore in the year 2024-25, against Rs 295.36 lakh crore in 2023-24, showing a growth rate of 9.7 per cent,” the NSO said. The government further said that 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,” the NSO said in the first advance estimates. Further, the NSO said that the nominal gross value added or 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,” it said. With the NSO’s first advance estimate for India’s projecting a slightly lower GDP growth of 6.4 percent in FY2025, experts and economists predict that the GDP growth in FY2026 will be crucially influenced by global uncertainties as well as domestic uncertainties, amidst considerable base effects. “Benefitting from an anticipated capex push in the upcoming Budget, we project the GDP growth at 6.5 per cent in FY2026,” said Aditi Nayar, chief economist and head – Research & Outreach, Icra Limited. As per Icra, the first advance estimate for India’s GDP and GVA growth of 6.4 per cent each in FY2025 is slightly lower than our forecast of 6.5 per cent each, led by mining, manufacturing, and services. “The NSO has effectively implicitly pegged the growth in the GDP and GVA for H2 FY2025 at 6.7 percent and 6.6 per cent, respectively, a mild 10-20 bps lower than our projections for the same,” she said.
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