Why in the News?
The Ministry of Statistics and Programme Implementation (MoSPI) released two important data sets on May 30, 2025 — one for India’s GDP growth in Q4 (January–March) FY25, and another for the provisional estimates for the entire FY25 (2024–25).
How is Economic Growth measured?
- Gross Domestic Product (GDP) measures economic growth by adding all expenditures in the economy — including private, government, and business spending. It shows demand-side performance.
- Gross Value Added (GVA) measures the supply-side. It calculates how much value is added by each sector of the economy.
- GDP and GVA are related:
GDP = GVA + (Taxes) – (Subsidies) - MoSPI reports both in:
- Nominal terms: Includes current prices.
- Real terms: Adjusted for inflation to reflect true growth.
Why are these Estimates called “Provisional”?
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Key Takeaways from FY25 Data
- India’s Economy Size:
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- India’s economy is now worth ₹330.7 lakh crore or $3.87 trillion.
- GDP grew by 9.8%, which is slower than in previous years.
- Real GDP Growth:
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- After removing inflation, real GDP grew by 6.5%.
- This is slower than the 9.2% growth seen last year (as mentioned in the Provisional Estimates). (Disputed: India’s real GDP growth rate was 8.2% in FY 2023-24 as per Economic Survey.)
- Sector Performance:
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- Agriculture grew well at 4.6%.
- Manufacturing grew only 4.5%, which is a concern.
- Construction was strong with 9.4% growth.
- Services grew by 7.2%.
- Manufacturing Worry:
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- Manufacturing is growing slower than agriculture.
- This is affecting urban jobs, especially for youth.
- Best Growth in Jan–Mar 2025 (Q4):
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- GDP growth was 7.4% in Q4 — the highest for the year.
- Construction grew fastest at 10.8%.
- Agriculture and Services also did well.
- Spending Trends:
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- People spent more — household spending rose 7.2%.
- Investment in assets grew 7.1%, slower than last year.
| [UPSC 2015] With reference to Indian economy, consider the following statements:
(1) The rate of growth of Real Gross Domestic product has steadily increased in the last decade. (2) The Gross Domestic product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct? Options: (a) 1 only (b) 2 only* (c) Both 1 and 2 (d) Neither 1 nor 2 |
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