India’s Provisional GDP Estimates for FY25

1. In May 2025, the National Statistics Office (NSO) under Ministry of Statistics and Programme Implementation (MoSPI) released:
   1. Q4 FY25 (Jan-Mar 2025) economic growth data.
   2. Provisional estimates for FY25 GDP growth.
2. These estimates provide insight into the size and growth of India’s economy for 2024-25.
3. Overall Economic Performance (FY25)

1. Headline Growth (FY25): India's real GDP grew by 6.5% in FY25, which is the slowest growth rate since the pandemic year 2020-21.
2. Q4 FY25 Performance:
   1. Real GDP growth accelerated to 7.4% in Q4 FY25, marking the fastest quarterly growth within FY25.
   2. However,  Q4 FY25 growth (7.4%) is higher than Q3 FY25 (6.4%) but slower than Q4 FY24 (8.4%) of the previous financial year (2023-24)
   3. Q4 performance pushed full-year GDP growth to 6.5%.
       

Measurement of National Income :
 

Term	Definition	Perspective
Gross Domestic Product (GDP)	Sum of all expenditures in the economy — by individuals, businesses, and the government OR Total monetary value of all goods and services produced within a country in a given period.	Demand-side
Gross Value Added (GVA)	Value added at each production stage by various sectors; sum of incomes from production.	Supply-side

1. Relationship:  GDP = (GVA) + (taxes earned by government) — (subsidies provided by government)
2. Data provided in nominal (current prices) and real terms (inflation-adjusted).
    

Why Are Estimates “Provisional”?
 

1. GDP estimates are released in stages with increasing data accuracy:
   • Jan: First Advance Estimates (FAEs)
   • End-Feb: Second Advance Estimates (SAEs) (includes Q3 data)
   • May: Provisional Estimates (PEs) (includes Q4 data)
   • Next 2 years: First Revised Estimates (1 year later), Final Estimates (2 years later)
2. Each revision refines accuracy based on more comprehensive data.

Key Economic Data (FY25)

a) Nominal GDP (at current prices)

1. Size: ₹330.7 trillion (₹33.07 lakh crore)
2. Growth over FY24: 9.8%
3. Dollar equivalent (₹85.559/USD): $3.87 trillion
4. Significance:
   1. 3rd slowest nominal GDP growth since 2014
   2. 6th slowest since 1991 economic liberalisation
   3. CAGR since 2014-15: 10.3%
   4. CAGR since 2019 (NDA 2.0): 9.8% (slowing trend)

b) Real GDP (inflation-adjusted)

1. Size: ₹188 trillion
2. Growth: 6.5% (vs. 9.2% in FY24) — sharp deceleration
3. CAGR since 2019: ~5% (low compared to previous decade)
4. Real GDP reflects actual increase in goods and services, removing the inflation effect.

Chief Economic Advisor V. Anantha Nageswaran said :

1. India’s post-COVID slowdown is “growth-scarce” environment resilient.
2. Growth differential between India and advanced economies is higher post-COVID than during the 2003-2010 boom era.
3. India’s economy outperforming many advanced economies amid global uncertainties like political conflicts and trade tensions.

Sectoral Performance :

Consumption and Investment :
 

Indicator	Growth FY25	Growth FY24	Notes
Private Final Consumption Expenditure (PFCE)	7.2%	5.6%	Household consumption accelerated
Gross Fixed Capital Formation (GFCF)	7.1%	8.8%	Investment growth slowed, despite Q4 jump to 9.4%

1. PFCE growth quickened, reflecting stronger consumer demand.
2. GFCF (asset creation) growth slowed overall despite a strong Q4 performance.

Manufacturing Sector: A Key Concern

1. Manufacturing GVA CAGR (since 2019-20): 4.04%
2. Lower than Agriculture & Allied (4.72%)
3. Implications:
   1. High urban youth unemployment
   2. Reverse labor migration to rural/agriculture sectors
   3. Weak manufacturing growth threatens India’s economic diversification and job creation

Government efforts:

• “Make in India” (2016) — boost manufacturing for jobs and exports

Global context: Manufacturing is critical amidst US-EU-China trade tensions.

Term / Concept	Definition	Explanation / Perspective
Nominal GDP	GDP measured at current market prices, without adjusting for inflation.	Shows the size of the economy in current prices; affected by inflation.
Real GDP	GDP adjusted for inflation; reflects actual increase in production of goods and services.	Measures true growth by removing price changes; better for comparing growth over time and across countries.
GDP Growth Rate	Percentage increase in GDP compared to previous period (usually year-on-year).	Indicates how fast the economy is expanding or contracting.
Compound Annual Growth Rate (CAGR)	Average annual growth rate over multiple years, assuming compounding.	Shows long-term growth trend, smoothing short-term fluctuations.
Provisional Estimates (PEs)	Initial GDP estimates for a financial year released after the year ends, subject to revision.	Based on data available till end of Q4; revised later for accuracy.
First Advance Estimates (FAEs)	Preliminary GDP estimates released mid-year, based on partial data.	Early indication of economic performance, less accurate.
Second Advance Estimates (SAEs)	Updated estimates including more complete data, usually after Q3.	Improves accuracy over FAEs but still provisional.
Taxes and Subsidies (in GDP)	Taxes on products add to GDP, subsidies reduce GDP.	GDP = GVA + Taxes − Subsidies; this adjusts supply-side value to demand-side GDP measure.
Private Final Consumption Expenditure (PFCE)	Total value of goods and services consumed by households.	A key driver of GDP; shows consumer demand and spending power.
Gross Fixed Capital Formation (GFCF)	Total investment in fixed assets (machinery, buildings, infrastructure).	Indicates investment trends; vital for future productive capacity and economic growth.
Sectoral Growth (Agriculture, Manufacturing, Services, Construction)	Growth rates of different sectors contributing to GDP.	Shows which parts of the economy are driving or slowing growth.
Supply Side vs Demand Side	Supply side focuses on production/output (GVA); demand side on spending/expenditure (GDP).	Two ways to measure economic activity; ideally both match in total value.
Growth Differential	Difference in growth rates between two economies or periods.	Used to compare India’s growth against advanced economies or previous eras.
Inflation Adjustment	Process of removing the effect of rising prices from economic data.	Allows comparison of real output or growth, not distorted by price changes.