India’s GDP Growth Slows to 6.5% in FY 2024-25

Growth Rate Declines

India’s economy is expected to grow at 6.5% in the 2024-25 fiscal year (ending March 2025), according to the Ministry of Statistics and Programme Implementation (MOSPI). This marks the slowest pace of growth since the COVID-19 pandemic caused a recession in 2021-22.

Slight Improvement from Initial Estimate

The growth estimate was initially 6.4% but has been revised slightly higher to 6.5%. However, this is a sharp drop from the 9.2% growth recorded in the previous fiscal year.

Challenges Impacting Growth

Several factors have contributed to the slowdown:

• High energy prices have increased costs for businesses and consumers.
• Slower growth in other Asian economies has affected trade and investment.
• Tight liquidity conditions caused by the Reserve Bank of India’s (RBI) restrictive monetary policies have made borrowing more expensive.
• The RBI’s intervention in foreign exchange markets to stabilize the rupee has also affected liquidity.

Key Economic Sectors

India’s economy is driven by various sectors:

• Services sector (trade, hotels, finance, real estate) contributes over 60% of GDP.
• Agriculture accounts for only 12% of GDP but employs more than 50% of the workforce.
• Manufacturing makes up 15% of GDP, while construction adds 8%.
• Mining, electricity, gas, and water supply contribute the remaining 5%.

Conclusion

Despite the slowdown, India remains one of the fastest-growing economies in the world. However, challenges like global economic conditions, inflation, and tight monetary policies could impact future growth.

India’s GDP Reaches $3.57 Trillion in 2023

India’s Economic Size

According to the World Bank, India’s Gross Domestic Product (GDP) was $3,567.55 billion ($3.57 trillion) in 2023. This means India’s economy contributed 3.38% of the world’s total GDP.

India’s GDP Growth

• India’s GDP increased from $3,353.47 billion in 2022 to $3,567.55 billion in 2023.
• The GDP growth rate (YoY) was 6.2% in December 2024, compared to 5.6% in the previous year.

GDP Per Capita

• The GDP per capita (economic output per person) was $2,236.31 in 2023, up from $2,086.08 in 2022.
• The GDP per capita based on purchasing power parity (PPP) was $9,160.06 in 2023, compared to $8,544.69 in 2022.

What is GDP?

GDP (Gross Domestic Product) measures the total value of goods and services produced in a country within a specific period. It is an important indicator of a country’s economic health.

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India’s Agriculture GDP Reaches a Record High in Q4 2024

Agriculture GDP Growth

India’s GDP from Agriculture increased to 7,683.51 INR billion in the fourth quarter of 2024, compared to 4,759.11 INR billion in the third quarter. This marks a significant rise in the sector’s contribution to the economy.

Historical Trends

• The average agriculture GDP from 2011 to 2024 was 4,728.58 INR billion.
• The highest ever recorded was 7,683.51 INR billion (Q4 2024).
• The lowest recorded was 2,690.74 INR billion in Q3 2011.

Agriculture’s Role in India’s Economy

• Agriculture contributes about 14% to India’s total GDP.
• However, it employs around 42% of the country’s workforce.
• Since 55% of India’s farmland relies on rainfall, the monsoon season plays a crucial role in agricultural output.