Home  /  Daily Current Affairs  /  08-01-2025 / First Advance Estimates of Annual Gross Domestic Product (GDP) 

First Advance Estimates of Annual Gross Domestic Product (GDP) 

Last updated on January 8th, 2025 Posted on January 8, 2025 by NEXT IAS Current Affairs Team  57

Syllabus :GS 3/Economy 

In News

  • The National Statistics Office (NSO) has released the First Advance Estimates of Gross domestic product (GDP) for FY 2024-25.
Gross domestic product (GDP)
– It is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. 
– As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.

About  First Advance Estimates of Annual Gross Domestic Product (GDP) 

  • The Advance Estimates of GDP are indicator-based and compiled using the benchmark-indicator method.
    • Data is sourced from various Ministries, Departments, and Private Agencies.
  • Sector-wise estimates are compiled using indicators like Index of Industrial Production (IIP), financial performance of listed companies, agricultural and horticultural crop estimates, production targets of livestock, fish production, and several other production and consumption indicators.

Key Highlights:

broad-sector-wise-growth-rates-of-real-GVA
  • Real GDP is estimated to grow by 6.4% in FY 2024-25, compared to 8.2% in FY 2023-24. 
  • Nominal GDP growth rate is 9.7% in FY 2024-25, compared to 9.6% in FY 2023-24.
  • Real Gross Value Added (GVA) has grown by 6.4% in FY 2024-25, compared to 7.2% in FY 2023-24. 
  • Nominal GVA growth rate is 9.3% in FY 2024-25, compared to 8.5% in FY 2023-24.
  • Sectoral Composition of Nominal GVA in FY 2024-25
Sectoral-Composition-of-Nominal-GVA-in-FY-2024-25
sector-wise-growth-rates
  • Components of GDP Growth: Private Consumption Expenditure (PFCE) Accounts for around 60% of GDP.
    • Private Final Consumption Expenditure (PFCE) Growth rate is 7.3% in FY 2024-25, compared to 4.0% in FY 2023-24.
    • Government Spending (GFCE): Accounts for 10% of GDP, but growth has been slow
      • Government Final Consumption Expenditure (GFCE) Growth rate is 4.1% in FY 2024-25, compared to 2.5% in FY 2023-24.
    • Gross Fixed Capital Formation (GFCF): This investment engine accounts for about 30% of GDP.
      • It has seen a growth of 6.3% this year but a slower 5.3% annual growth since 2014.
    • Net Exports: India has a trade deficit (more imports than exports), but the gap has reduced recently.

GDP Growth Limitations

  • Sluggish private consumption growth is holding back GDP growth.
  • Investment in the economy has been tapering off, with businesses hesitant to expand due to low consumption.
  • Government spending is not growing rapidly enough to stimulate the economy significantly.
  • India has experienced high growth rates post-Covid, but this is partly due to a low base effect from 2020-21 when GDP contracted.
  • India’s real GDP growth is below 5% annually, far lower than the ideal growth needed to become a developed economy by 2047.

Conclusion and Way Forward 

  • The First Advance Estimates of GDP for FY 2024-25 indicate a moderate but steady economic growth amidst various global and domestic challenges. 
  • These estimates provide crucial insights for policymakers and stakeholders to navigate the economic landscape and make informed decisions to foster sustainable growth and development.
Do you know?
– Primary Sector: Agriculture, Livestock, Forestry & Fishing and Mining & Quarrying
– Secondary Sector: Manufacturing, Electricity, Gas, Water supply & Other Utility Services and Construction
– Tertiary Sector: Trade, Hotels, Transport, Communication and Services related to Broadcasting, Financial, Real Estate & Professional Services and Public Administration, Defence & Other Services

Source :IE

 
Previous article India, U.S. to Jointly Manufacture Interoperable Sonobuoys for Navy
Next article New Method of Increasing Nitrogen Use Efficiency