Context:
The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) recently released the First Advance Estimates of Annual Gross Domestic Product (GDP) for the Financial Year (FY) 2024-25, including its expenditure components at both Constant (2011-12) and Current Prices.
Key Highlights of India’s GDP Estimate (2024-25):
- GDP Growth:
- Real GDP growth: 6.4%, down from 8.2% in 2023-24.
- Nominal GDP growth: 9.7%, reaching ₹324.11 lakh crore.
- Sectoral Growth:
- Primary Sector: Growth of 3.6%, a recovery from 2.1% in 2023-24.
- Secondary Sector: Growth of 6.5%, down from 9.7% in 2023-24.
- Manufacturing: Largest contributor (14%).
- Construction: Second-largest contributor (9%).
- Tertiary Sector: Growth of 7.2%, down from 7.6% in 2023-24.
- Consumption Expenditure:
- Private Final Consumption Expenditure (PFCE): Growth of 7.3% compared to 4% in the previous year.
- Government Final Consumption Expenditure (GFCE): Growth rebounded to 4.1%, up from 2.5%.
- Gross Value Added (GVA):
- Real GVA growth: 6.4%, down from 7.2% in the previous year.
- Nominal GVA growth: 9.3%, reaching ₹292.64 lakh crore.
- Net Exports:
- Typically a negative contributor to GDP due to higher imports than exports.
- Drag effect grew by 144%, though overall deceleration from 19.6% to 13.3% suggests improvement over time.
Definitions of Key Economic Terms:
- Private Final Consumption Expenditure (PFCE):
- Expenditure by resident households and non-profit institutions serving households (NPISH) on final consumption of goods and services.
- Includes expenditure made within or outside the economic territory.
- Government Final Consumption Expenditure (GFCE):
- Total government spending on goods and services.
- Includes employee compensation.
Observations on India’s Economic Performance
- Economic Recovery:
- GDP growth indicates recovery after Covid-induced disruptions.
- Growth primarily due to a low base effect in FY22 and FY23.
- Growth Deceleration:
- Slower growth observed in the second term of the current government compared to the first term.
- GDP contraction of -5.6% in 2020-21 impacted long-term growth.
- Investment and Consumption:
- Investment growth driven largely by public spending.
- Private consumption remains muted, affecting the largest GDP engine.
National Statistical Office (NSO):
- Formation: Formed in 2019 by merging the Central Statistical Office (CSO) and the National Sample Survey Office (NSSO).
- Recommendation: Establishment suggested by the C. Rangarajan Committee as the nodal body for core statistical activities.
- Affiliation: Operates under the Ministry of Statistics and Programme Implementation (MoSPI).
- Function: Collects, compiles, and disseminates reliable, objective, and relevant statistical data.
Source: IE
Previous Year Question
Consider the following statements:
1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
[UPSC CSE – 2020 Prelims]
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Answer: (d)