The Gross Value Added, which provides a sector-wise breakdown, mirrors the GDP trend, growing at 6.4 per cent in real terms compared to 7.2 per cent in 2023-24. The nominal GVA is expected to rise by 9.3 per cent, reaching ₹292.64 lakh crore in 2024-25.

In its First Advance Estimates for the financial year 2024-25, the National Statistics Office (NSO) of the Ministry of Statistics and Programme Implementation (MoSPI), has projected India’s Gross Domestic Product (GDP) growth at 6.4 per cent in real terms. This marks a slowdown from the 8.2 per cent growth recorded in 2023-24. The data, released on Monday, also highlights key sectoral performances and expenditure trends that shape the economic outlook for the year.

The real GDP, measured at constant 2011-12 prices, is estimated to reach ₹184.88 lakh crore in 2024-25, up from ₹173.82 lakh crore in 2023-24. Despite the reduced pace, nominal GDP, which factors in current price levels, is projected to grow by 9.7 per cent to touch ₹324.11 lakh crore. This figure is slightly higher than the 9.6 per cent growth recorded in the previous year, says a press release from the PIB.

The Gross Value Added (GVA), which provides a sector-wise breakdown, mirrors the GDP trend, growing at 6.4 per cent in real terms compared to 7.2 per cent in 2023-24. The nominal GVA is expected to rise by 9.3 per cent, reaching ₹292.64 lakh crore in 2024-25.

Sectoral Highlights

Agriculture and allied sectors, a vital component of India’s economy, are forecasted to grow at 3.8 per cent in real terms, significantly improving from the modest 1.4 per cent growth seen in 2023-24. This improvement reflects favourable weather conditions and strong horticultural and livestock performance.

The construction sector is anticipated to grow robustly at 8.6 per cent, buoyed by increased infrastructure investment and demand for housing. Similarly, the “Financial, Real Estate & Professional Services” sector is expected to expand by 7.3 per cent, driven by a recovering real estate market and robust financial activities.

Expenditure Trends

Private Final Consumption Expenditure (PFCE), a key driver of domestic demand, is projected to grow by 7.3 per cent in 2024-25, a sharp increase from the 4.0 per cent growth recorded in 2023-24. This reflects improved consumer confidence and rising disposable incomes.

Government Final Consumption Expenditure (GFCE) is estimated to grow by 4.1 per cent, rebounding from 2.5 per cent in the previous year. This uptick suggests an emphasis on public spending to support economic activity amid slowing growth.

The estimates reveal positive contributions across sectors:

• Industry: Aided by stable production metrics and strong construction growth, the industrial sector continues to anchor economic performance.
• Services: With a growth forecast of 7.3 per cent, the services sector remains a cornerstone, particularly in financial services and real estate.
• Agriculture: The rebound in agriculture underscores the sector’s resilience and its role in supporting rural incomes and employment.

Methodology and Data Sources

The NSO’s First Advance Estimates are compiled using the benchmark-indicator method, which extrapolates data from the previous financial year with updated sectoral indicators. The estimates incorporate diverse inputs such as:

• Industrial production metrics from the Index of Industrial Production (IIP).
• Quarterly financial results of listed companies.
• Agricultural output estimates from the Ministry of Agriculture and Farmers’ Welfare.
• Data on key infrastructure inputs like coal, crude petroleum, and natural gas production.
• Transport metrics, including railways, civil aviation, and port cargo traffic.
• Goods and Services Tax (GST) collections and fiscal data from government accounts.

Tax Revenues and Subsidies

The estimates integrate budgetary projections for 2024-25 along with real-time fiscal data. Tax revenue calculations include both GST and non-GST components, while subsidies account for expenditures on food, petroleum, and fertilizers. These factors contribute to the overall assessment of government consumption and fiscal health.

Implications for Economic Planning

The slowdown in GDP growth highlights the need for targeted policy interventions to sustain momentum. While sectors like construction and financial services show resilience, the moderation in overall growth reflects global economic headwinds, subdued export performance, and inflationary pressures.

Improved agricultural growth offers some solace, indicating the potential for rural recovery. Meanwhile, robust private consumption suggests that domestic demand remains a critical growth lever.

The NSO cautioned that the First Advance Estimates are subject to revision as more data becomes available. Improved data coverage and updated inputs could lead to adjustments in subsequent estimates. The Second Advance Estimates for 2024-25, along with quarterly GDP figures for October-December 2024, are scheduled for release on February 28, 2025.

India’s economy remains on a growth trajectory, albeit at a slower pace than the previous year. With a projected real GDP growth of 6.4 per cent in 2024-25, the focus will likely shift to sustaining recovery and addressing structural challenges. The emphasis on private consumption, public expenditure, and infrastructure development will play a crucial role in shaping the country’s economic path in the coming year.