New Delhi, Jan 7: India’s economy is expected to grow by 6.4% in the 2024-25 fiscal year, marking its slowest pace in four years. This slowdown is mainly due to weaker performance in manufacturing and services, according to new data from the National Statistics Office (NSO).
This growth rate is the lowest since the COVID-19 pandemic year of 2020-21, when the economy shrank by 5.8%. In recent years, India saw growth rates of 9.7% in 2021-22, 7% in 2022-23, and 8.2% in the last fiscal year ending March 2024.
The NSO’s estimate is slightly below the Reserve Bank of India’s forecast of 6.6% and the finance ministry’s prediction of 6.5-7%. These figures will help shape the Union Budget, which Finance Minister Nirmala Sitharaman will present on February 1.
Manufacturing is expected to grow by 5.3%, down from 9.9% last year. The services sector, which includes trade, hotels, transport, and communications, is projected to grow by 5.8%, compared to 6.4% previously.
On a positive note, the agriculture sector is expected to grow by 3.8%, up from 1.4% last year.
“Real GDP is estimated to grow by 6.4% in FY 2024-25,” said the NSO.
Nominal GDP, which measures current prices, is set to increase by 9.7% to Rs 324.11 lakh crore in 2024-25, up from Rs 295.36 lakh crore in 2023-24. This makes the economy about USD 3.8 trillion in size, using an exchange rate of Rs 85.7/USD.
The Gross Value Added (GVA) is expected to reach Rs 292.64 lakh crore, growing by 9.3% from Rs 267.62 lakh crore in the previous year.
Consumer spending, known as Private Final Consumption Expenditure (PFCE), is predicted to grow by 7.3% in 2024-25, compared to 4% last year. Government spending is also expected to rise, with a growth rate of 4.1%, up from 2.5% in the prior year.
