India's Growth Slides From 8.2% to 6.4% in FY 24-25: Govt Report Real GVA for FY 2024-25 is estimated to be INR 168.91 lakh crore, compared to INR 158.74 lakh crore in FY 2023-24, which implies a growth rate of 6.4 per cent. This is especially lower than the 7.2 percent real GVA growth achieved in the previous financial year.

According to the latest review by the Ministry of Statistics and Programme Implementation report, India is expected to continue down the path of tempered yet potential growth in FY 2024-25. Even though the country has shown resilience with strong economic activities, the rate of growth seems to be slowing down compared to the impressive performance of the previous fiscal year. The real Gross Domestic Product (GDP) is estimated to grow at 6.4 per cent in FY 2024-25, a two per cent fall from the 8.2 per cent growth estimated in FY 2023-24's provisional estimates (PE).

The level of estimated real GDP in FY 2024–25 is INR 184.88 lakh crore as compared to INR 173.82 lakh crore in FY 2023–24. Nominally, the GDP is expected to grow at 9.7 per cent to INR 324.11 lakh crore against the growth rate of 9.6 per cent in the last fiscal. This near-zero nominal growth outlook confirms inflation is under control, credit to the government for this while global inflation threatens. However, the muted growth in real GDP implies adjustment in critical economic activities after the upsurge in FY 2023-24 due to the post-pandemic spurt.

A more accurate measure of economic output, Real Gross Value Added (GVA), follows a similar pattern to GDP. Real GVA for FY 2024-25 is estimated to be INR 168.91 lakh crore, compared to INR 158.74 lakh crore in FY 2023-24, which implies a growth rate of 6.4 per cent. This is especially lower than the 7.2 percent real GVA growth achieved in the previous financial year. Nominally, GVA is projected at 9.3 per cent growth in FY 2024-25, a little above the 8.5 per cent in FY 2023-24. The step-down in real GVA growth emphasizes moderated expansion in critical sectors but underscores progress toward long-term economic stabilization as well.

Among sectors, the agriculture and allied activities sectors provide a silver lining in FY 2024-25, with real GVA growth estimated at 3.8 per cent (versus 1.4 per cent in FY 2023-24). This rise signifies good monsoons, higher rural demand, and supportive government measures that have given the much-needed support to the agrarian economy. Agriculture's revival is important because it is the bedrock of rural livelihoods, but also of food security.

The construction sector, on the other hand, is poised to maintain a healthy momentum, expanding at an real GVA growth rate of 8.6 per cent, led by sustained investments in infrastructure and housing. This sector has remained vibrant thanks to government requirements for large-scale public projects and private sector involvement. Likewise, the financial, real estate, and professional services sector is projected to grow by 7.3 per cent in FY 2024-25, suggesting strong urban real estate and professional services activity, despite global economic uncertainties keeping a dampener on investor sentiment.

Private consumption remains a key driver of India's growth story, with Private Final Consumption Expenditure (PFCE) at constant prices slated to grow by 7.3 per cent in FY 2024-25, a sharp acceleration from four per cent growth in FY 2023-24. The rise indicates increasing disposable incomes along with a rebound in consumer confidence and a robust middle class willing to spend. Whether on discretionary goods or essential services, the surge in private consumption emphasizes how the broader economic recovery is coursing up and down income strata.

On the front of public expenditure, it is expected that Government Final Consumption Expenditure (GFCE) at constant prices in FY 2024-25 will grow by 4.1 per cent, higher than 2.5 per cent in GFCE in FY 2023-24. The government's calibrated spending approach plays a key role in retaining growth momentum while not sacrificing macro-economic stability.

Though these indicators are generally good, one must be aware of several headwinds that could temper growth prospects for the upcoming fiscal year. The international economic context remains an important determinant, as geopolitical tensions and tightening monetary policies in advanced economies, alongside highly volatile commodity prices, continue to develop.

The slowdown in overall growth also highlights the need for deeper structural reforms if the economy is to sustain long-term expansion.