India’s Gross Domestic Product (GDP) is projected to grow at 6.4% in the financial year 2024-25 down from 8.2% growth recorded in 2023-24, according to the first advance estimates released by the Ministry of Statistics on Tuesday. 

The projection is lower than the recent RBI’s estimate of 6.6% for the current fiscal year but India still remains the fastest-growing major economy in the world with China’s growth rate slipping to below 5%.

The GDP rate of 6.4% is the lowest since 2020-21. In 2023-24, it was 8.2%, 7% in 2022-23, and 9.7% in 2021-22.

The NSO, in its first advance estimate of National Income for 2024-25, has also predicted a slump in manufacturing sector, which can go as low as 5.3% from 9.9% in previous fiscal.

The agriculture, construction and services sectors have emerged as the bright spots, recording an acceleration in the rate of growth compared to the previous year, the figures show.

Agriculture and allied sectors are estimated to grow by 3.8% during 2024-25 as compared to the growth of 1.4% witnessed during the last year. The construction sector and financial, real estate, and professional services sectors are estimated to observe good growth rates of 8.6% and 7.3%, respectively.

There has also been a pick up in the private final consumption expenditure, which has witnessed a growth rate of 7.3% during this fiscal over the growth rate of 4% in the previous year, according to the official statement.

Releasing the first advance estimates of national income for 2024-25, the NSO said, "Real GDP has been estimated to grow by 6.4% in FY2024-25 as compared to the growth rate of 8.2% in Provisional Estimate (PE) of GDP for FY2023-24".

The figures have been released ahead of the Union Budget 2024-25, underscoring the need to spur growth with continued investments in large infrastructure projects and focus on maintaining the momentum in the agriculture sector.

India’s economy clocked a GDP growth rate of 5.4% for the second quarter (July-September) of the current financial year which was a marked slowdown over the previous quarter.

The unexpected slowdown in the second quarter prompted the Reserve Bank of India (RBI) to lower its estimate for the growth forecast to 6.6%, from the earlier projection of 7.2%.

(with inputs from syndicated feed)