India’s GDP Growth Slows to 6.4% in FY25: A Four-Year Low
India’s economic growth is set to decelerate, with the Ministry of Statistics & Programme Implementation (MoSPI) projecting GDP growth at 6.4% for FY 2024-25—the lowest in four years. This marks a decline from the robust 8.2% growth achieved in FY 2023-24 and raises critical questions about the trajectory of the nation’s economy.
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Key Insights from the GDP Data
1. Decline in Real GDP Growth
The projected 6.4% growth rate reflects challenges across multiple sectors, compounded by global economic headwinds. Real GDP, a core measure of economic activity adjusted for inflation, shows a stark drop from the previous year’s pace.
2. Slower Growth in Gross Value Added (GVA)
The Gross Value Added (GVA) growth rate is also expected to slow to 6.4% in FY25, down from 7.2% in FY24. While the construction sector grew by 8.6%, showcasing strong infrastructure development, and financial services expanded by 7.3%, other sectors saw muted growth.
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3. Agriculture Picks Up Pace
The agriculture and allied sectors are a bright spot, with GVA growth improving to 3.8%, a sharp rise from the 1.4% growth recorded last year. Favorable weather and government support have played a key role.
4. Private Consumption Strengthens
Private Final Consumption Expenditure (PFCE) grew by 7.3%, compared to 4% in FY24, reflecting stronger consumer demand. Meanwhile, government spending also increased, with Government Final Consumption Expenditure (GFCE)growth rising to 4.1% from 2.5% in the previous fiscal year.
What Does This Mean for India’s Economy?
The projected slowdown in GDP growth highlights the need for robust policy measures to stimulate investment and enhance productivity. While sectors like agriculture and construction provide optimism, overall economic momentum remains subdued. Policymakers must prioritize reforms to maintain stability and ensure sustainable growth.
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