📉 INDIA’S GDP OUTLOOK 2024-25
Growth Slows to 6.4% Amid Investment Concerns

📊 First Advance Estimates Raise Red Flags

India’s economy is expected to grow at 6.4% in real terms and 9.7% in nominal terms in the fiscal year 2024-25, according to the latest First Advance Estimates. While still strong globally, this falls short of earlier projections by the Reserve Bank of India, which had pegged growth at 6.6% (real) and 10.5% (nominal).

🏭 Sectoral Snapshot: Manufacturing Falters

• The manufacturing sector, which grew by 9.9% in 2023-24, is now expected to grow by only 5.3%.
• This decline has significantly contributed to the overall dip in GDP growth.
• Other sectors such as services and agriculture are expected to maintain moderate stability, cushioning the slowdown.

🏗️ Investment and Capital Formation Trends

• Gross Fixed Capital Formation (GFCF) — a key indicator of investment — has remained stable at 33.4% of GDP from 2021-22 to 2024-25.
• For 2025-26, this trend is expected to continue, supporting a modest recovery to 6.5% GDP growth.

🚧 Government Capital Expenditure: A Cause for Concern

📉 Government capex has contracted by -12.3% during the first eight months of 2024-25.
💰 Only ₹5.14 lakh crore has been spent — just 46.2% of the total target.

This slowdown raises concerns about the crowding-in effect of public investment — a crucial factor for stimulating private sector growth.

📈 Future Growth Projections: Hope with Headwinds

According to the International Monetary Fund (IMF):

• India is projected to maintain a steady 6.5% real GDP growth rate from 2025-26 to 2029-30
• Inflation is expected to hover around 4%, supporting nominal growth of 10.5–11%

⚠️ Challenges on the Horizon

• As the economic base grows, achieving consistent 6.5%+ growth becomes increasingly challenging
• A revival in government capex is critical to stimulate private sector confidence and long-term investment
• Strategic reforms and public infrastructure spending will determine whether India can sustain its global economic momentum 🚀

India’s economic journey continues — strong but not without turbulence. 📉📊 Strategic investments today will shape the growth story of tomorrow.