Context: 

India’s economic growth is projected to decelerate in 2024-25, with the Gross Domestic Product (GDP) expected to grow at 6.4%. 

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• The National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) recently released the first advance estimates of annual GDP for the financial year (FY) 2024-25 along with its expenditure components both at constant (2011-12) and current prices.
• The first estimate is used as a base for the Union Budget due to be announced on February 1.

Key Highlights

GDP Growth Rate Projections:

• Real GDP (at constant price) has been estimated to grow by 6.4% in FY 2024-25 as compared to the growth rate of 8.2% in the Provisional Estimate (PE) of GDP for FY 2023-24. 

• Nominal GDP (at current price) has witnessed a growth rate of 9.7% in FY 2024-25 over the growth rate of 9.6% in FY 2023-24.

• This is the lowest growth rate since the COVID-19 pandemic year (2020-21) when India experienced negative growth of -5.8%.

• Real GVA has grown by 6.4% in FY 2024-25 over the growth rate of 7.2% in FY 2023-24. 

• Nominal GVA has shown a growth rate of 9.3% in FY 2024-25 as compared to the growth rate of 8.5% in FY 2023-24.

• The first advance estimates of National Income for 2024-25, released by the National Statistics Office (NSO), project India's GDP growth at 6.4%, which is slightly lower than the 6.6% growth forecast by the Reserve Bank in December 2024. 

• It is also marginally below the finance ministry's initial projection of 6.5-7% growth.

Sector Wise Performance:

• Manufacturing Sector: Manufacturing GVA growth is expected to decelerate to 5.3% in 2024-25, a notable slowdown from the 9.9% growth in 2023-24.
• Services Sector:  Trade, Hotels, Communication and Services related to Broadcasting is projected to expand at GVA growth of 5.8%, down from 6.4% in the previous fiscal year.
• Agricultural Sector: The agriculture sector shows a positive trend with an expected GVA growth rate of 3.8% in 2024-25, improving from 1.4% in 2023-24.
• The only other sector expected to show an improvement in GVA growth this year is Public Administration, Defence, and Other Services, which is projected to rise by 9.1%, up from 7.8% last year

GDP, GVA and other Economic indicators:

• Real GDP or GDP at Constant Prices is estimated to attain a level of ₹184.88 lakh crore in the financial year 2024-25, against the Provisional Estimate of GDP for the year 2023-24 of ₹173.82 lakh crore. 

• Nominal GDP or GDP at Current Prices is estimated to attain a level of ₹324.11 lakh crore in the year 2024-25, against ₹295.36 lakh crore in 2023-24, showing a growth rate of 9.7%.

• The size of India’s economy is expected to be around USD 3.8 trillion (at ₹85.7 per USD) in 2024-25.

• Real GVA is estimated at ₹168.91 lakh crore in the year 2024-25, against the PE for the year 2023-24 of ₹158.74 lakh crore, registering a growth rate of 6.4% as compared to 7.2% growth rate in 2023-24.

• Nominal GVA for 2024-25 is estimated at ₹292.64 lakh crore, showing a growth of 9.3% from ₹267.62 lakh crore in 2023-24.

• Private Final Consumption Expenditure (PFCE) at constant prices grew by 7.3% in 2024-25, up from 4% in the previous year.

• Government Final Consumption Expenditure (GFCE) at constant prices has rebounded to 4.1% growth, compared to 2.5% in the previous fiscal year, signalling increased government spending.

• Per capita income at current prices is estimated to increase by 8.7%, reaching ₹2,00,162 per annum, up from ₹1,84,205 in the preceding fiscal.