New Delhi2 hours ago
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In 2020-21, there was a decline in economies around the world due to Corona, the same trend was seen in India also.
The government has maintained the GDP estimate for the financial year 2024-25 at 6.4%. The Statistics Ministry released these figures today i.e. on Tuesday, January 7.
A year ago, i.e. in 2023-24, this figure was 8.2%. This time the GDP growth estimate has been reduced due to a possible decline in manufacturing and investment growth.
Growth was recorded at 9.7% in FY 2022, 7% in FY 23, and 8.2% in FY 24. That means, in the last 4 years, GDP growth has been only 7% or above. For the first time it may fall below 7%.
GDP decreased due to recession in manufacturing sector
Gross Value Added i.e., GVA data shows that there may be a recession in the manufacturing sector. Its growth is expected to decline to 5.3% from 9.9% last year. Investment growth has also disappointed and has come down to 6.4% from last year’s growth of 9%.
CRISIL Chief Economist Dharamkirti Joshi said – India’s GDP growth may decline from 8.2% to 6.4% compared to the last financial year due to slowdown in the second quarter, less fiscal stimulus, higher interest rates and strict lending norms.
India is still the fastest growing economy among major countries
Despite slow GDP growth, India still remains the fastest growing economy among major economies.
Despite a sluggish first half (H1) of FY 2025, the ministry expects growth to sustain in the second half on the back of increased agricultural and industrial activities as well as rural demand.
China’s GDP growth estimated at 4.6%, Japan’s at 0.9%, India at 6.6%
China’s GDP growth in the July-September quarter of this financial year was 4.6%. Whereas Japan’s GDP has grown at the rate of 0.9%. Whereas for India, the Reserve Bank had given a growth estimate of 6.6%.
Now know how to know GDP and the health of the economy through it.
What is GDP? GDP is one of the most common indicators used to track the health of the economy. GDP represents the value of all goods and services produced within a country in a specific time period. In this, the foreign companies which produce within the country’s borders are also included.
There are two types of GDP There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at the base year’s value or stable price. At present the base year for calculating GDP is 2011-12. Whereas nominal GDP is calculated at current price.
How is GDP calculated? A formula is used to calculate GDP. GDP=C+G+I+NX, here C means private consumption, G means government spending, I means investment and NX means net export.
Who is responsible for the fluctuations in GDP? There are four important engines for increasing or decreasing GDP. The first is you and me. Whatever you spend contributes to our economy. Second is private sector business growth. It contributes 32% to GDP. Third is government expenditure.
This means how much the government is spending to produce goods and services. It contributes 11% to GDP. And fourth is, net demand. For this, India’s total exports are subtracted from total imports, because India has more imports than exports, hence its impact on GPD is negative.
