GROSS DOMESTIC PRODUCT (GDP) ESTIMATES FOR 2024-25

 GROSS DOMESTIC PRODUCT (GDP) ESTIMATES 2024-25

 National Statistics offfice of the Ministry of Statistics and Programme implementation has recently released Provisional GDP estimates for 2024- 25 and quarterly  estimate for the fourth quarter Q4 for the period January- March 2025. It has been observed that the GDP growth estimated for the full year 2024-25 was 6.5% the slowest since the pandemic Covid19 period. In 2021- 22  GDP growth was 9.7%,which fluctuated to7.6% in 2022-23  and further rose to9.2% in 2023-24.The fourth quarter of Q4  period of January-March in the Fy 2024 -25  scored maximum growth rate of 7.4%,which is still lesser than 8.4% achieved in Q4 of 2023-24. GDP growth at constant prices is estimated  to reach ₹187.97 lakh crores in 2024-25 as against ₹176.51 lakh crores  in the first revised estimate (FRE) of GDP for Financial year 2023-24. Similarly Gross Value  Added (GVA ) is estimated to be ₹171.87 lakh crores in 2024-25 compared to FRE GDP of ₹ 161.51 lakh crores in 2023-24. However GVA growth at constant prices drastically declined from 8.of 6% in in 2023-24 to 6.4% in 2024-25.India's Quarterly GDP growth rate for 2024-25 was Q1 6.7% Q2 5.4 % ,Q3 5.4% and Q4 7.4% respectively. 

Sector wise distribution of real GVA growth rates for financial years  2023-24 and 2024-25 indicated that agriculture, livestock, forestry and fishing grew only at 2.7% in 2023-24 and in  Q4 (0.8)which increased to4.6% in 2024-25 as against mining and quarying which grew 3.2% in 2023-24(  declined to 2.7% in Q1 in Fy 2024-25). Manufacturing which performed exceptionally good at 12.3% in 2023-24 drastically plummeted to 4.5% in 2024-25. Similarly Electricity  gas,water supply  and other utilities grew at 8.6% in 2023-24 as against 5.6% growth in 2024-25. Construction sector also witnessed a marginal decline from 10.4  in 23-24 to 9.4 in 25-26.Trade,hotels, transport, Communications, and broadcasting services witnessed decline from 7.5% growth in 2023-24 to 6.1% in 2024-2025 .Financial sector, real estate and professional services also indicated decline from 10.3% in 2023-24 to only 7.2% in 2024-25. On the otherhand  important sevice sectors like public administration,Defence and  other services contributed almost same share in GDP growth with 8.8.% and marginal increase of 8.9 %  respectively for 2023-24 and 2024- 25 .

Estimates regarding expenditure components at constant prices for 2023-24 showed that  Private Final consumption expenditure (PFCE)  grew at 5.6% in 2023-24 to 7.2% in 2024-25. While rural consumption demand is poised to increase given the prospects of good monsoon and upbeat in agricultural production and lower inflation and interest rates.Infact consumer  price Index (CPI)  based inflation remained well below the  RBI targeted level of 4% for the last three months. Food inflation declined drastically from 9.7% in October 2024 to 2.1% in April 2025.On the otherhand urban demand for  consumption remains subdued reportedly  because of muted urban consumption level and lack of employment opportunities.Government Final consumption expenditure (GFCE) which was at a higher level of 8.1% in 2023-24 declined to mere 2.3% in 2024-25.Gross Fixed Capital Formation(GFCF) which stood at 8.8% in 2023-24 declined to7.1% in 2024-25. Changes in stock that recorded 53.4% change in 2023-24 declined to mere 4.5%  growth in 2024-25.

PROBLEMS AND PERSPECTIVES 

Given the global uncertainties of  geopolitical tensions,trade and thttps://draft.blogger.com/blog/post/edit/3708741038920334507/6181610256037254271 wars and global supply chain disruptions India's GDP growth of 6.5% achieved for 2024-25 is relatively commendable. Our primary sector performed better in 2024-25 compared to 2023-24.  Gross Fixed Capital Formation registered healthy recovery with 9.4% growth while service exports did exemplary well making external sector resilient and reducing current Account Deficit  to just 0.9 % Of  GDP. However sectors like manufacturing, construction  ,private sector investment and public infrastructure development should continue to increase momentum further. According to Sanjeev Sanyal reforms undertaken in the Indian economy for the last three and half decades enabled to become the 4th largest economy with compounding growth India achieved GDP 1$trillion in 2007,$ 2 trillion in 2014 and $ 5 trillion in 2025, and further exchallen8pected to  reach $ 28  - 35 trillion when we would reach  the target of Viksit Bharat status in 2047.Continued GDP growth rate of 6% + will enable us to overtake Germany by 2027 and become the third largest economy of the world ,in terms of  global GDP share,eventhough it is a matterof pride for the country to become the fourth largest economy but in terms of percapita income we will continue to be poor with highly skewed distribution of income and wealth. Domestically the declining opportunities for employment, reduction in government jobs and the policy of hire and fire followed invariably by the private sector.poses grave challenges to citizens of the country.Inorder to  amilerorate such challenges Proper utilisation of infrastructure quality development human resources with strategic skill development and academic planning will enable  not only to exploit global opportunities but also add to opening new supply chains globally. Such a scenario will lead to generation of higher percapita income and higher standard of living in the country .Moreover  in the absence of an effective multilateral arrangement for global trade free trade agreements reached with countries like  South Korea, Japan, Srilanka, Bhutan, Thailand, Singapore, Malaysia, Mauritius, UAE  Australia and the European Free Trade Association. Moreover country is in the process of finalizing Free Trade Agreement  with both USA and European Union. Free Trade agreements if effectively followed  with necessary cautions and diplomacy it can create more trade, employment and investment boosting welfare of the country .However restrictive and irrational policies followed by present US administration resulted in both inflationary condition and weakening of the US dollar by 10% and reduction in growth projected from 3% to 1% along with displacing  workers and students of  many countries including India. We have to address these issues through diversification and building up domestic economy stronger. Being the fourth largest economy should give us better leverage in global trade,payments and investment flows. We should avoid irrational and meek surrendering to global powers.Free Trade Agreements with many countries, weakening of the US dollar, a practically defunct WTO  etc brings opportunities for more trade with FTA partners evolving appropriate payment systems even with the consent of BRICS countries. 



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