India’s GDP growth seen lower at 6.7% in April-June FY25

India’s national income or gross domestic product (GDP) in real terms, ie, after adjusting for inflation, increased at a slower pace of 6.7 per cent to Rs43.64 lakh crore in the first quarter of the current financial year, ie April-June 2024-25, compared to the growth rate of 8.2 per cent to Rs40.91 lakh crore in Q1 of FY 2023-24.

Nominal GDP, or national income at current prices, however, grew at a faster pace of 9.7 per cent to Rs77.31 lakh crore in Q1 of FY 2024-25 compared to the growth rate of 8.5 per cent to Rs70.50 lakh crore in Q1 of FY 2023-24.

Gross Value Added (GVA) in real terms also grew at a slower pace of 6.8 per cent to Rs40.73 lakh crore in Q1 of FY 2024-25 against a growth rate of 8.3 per cent to Rs38.12 lakh crore in Q1 of the previous financial year. 

GVA growth in the quarter was driven by an 8.4 per cent growth in the secondary sector that includes construction (10.5 per cent), electricity, gas, water supply and other utility services (10.4 per cent) and manufacturing (7.0 per cent) sectors.

GVA growth in nominal terms during Q1 of FY 2024-25 is estimated to have grown at 9.8 per cent to Rs70.25 lakh crore compared to a growth rate of over 8.2 per cent to Rs63.96 lakh crore in Q1 of FY 2023-24.

Private Final Consumption Expenditure (PFCE) at constant prices increased by 7.4 per cent in the April-June 2024-25 quarter while Gross Fixed Capital Formation (GFCF) recorded a growth of 7.5 per cent during the quarter.

Net tax collection, at current prices, increased by 8.0 per cent in Q1 of FY 2024-25 which caused a divergence og 0.1 per cent between the growth rates of GVA and GDP, according to the National Statistics Office.