GDP growth at 6.5%, the slowest since pandemic, Pg1

Key Highlights:

• India’s real GDP growth for FY 2024–25 stood at 6.5%, the slowest since the pandemic year 2020–21.

• Q4 GDP growth was 7.4%, highest in 2024–25 but lower than 8.4% in Q4 FY24.

• Manufacturing sector grew 4.8% in Q4; annual growth at 4.5%, down from 11.3% base.

• Construction sector posted 10.8% growth in Q4, up from 8.7% in Q4 FY24.

• Agriculture sector continued strong quarterly performance.

• Household consumption rose to 7.2% in FY25, compared to 5.6% in FY24.

• Chief Economic Adviser emphasized India's relative outperformance in a "growth-scarce" global environment.

Detailed Insights:

• Despite a deceleration in the full-year growth rate, Q4 figures show economic resilience driven by strong performances in construction and agriculture.

• The manufacturing sector’s moderate growth reflects base effect and external uncertainties.

• The rise in household consumption signals improving domestic demand, possibly aided by rural recovery and controlled inflation.

Scientific/Technical Concepts Involved:

• Real GDP: GDP adjusted for inflation, representing actual economic output.

• Base Effect: A statistical phenomenon where high/low growth in a previous period skews current growth interpretation.

• Growth Differential: The gap between India's GDP growth rate and that of advanced economies, indicating relative performance.

Mains Mock Question:

Discuss the recent trends in India's GDP growth, highlighting sectoral performance and consumption patterns. What do these trends indicate about post-pandemic economic recovery?