Economic Growth Projections for India

The First Advance Estimates (FAE) for the fiscal year 2024-25 indicate a real GDP growth of 6.4% and a nominal GDP growth of 9.7%. This is slightly below the Reserve Bank of India's (RBI) revised estimates and the Union Budget projections.

Comparison with Previous Estimates

• The RBI’s revised growth estimates were 6.6% for real GDP and 10.5% for nominal GDP.
• The growth for the first half of 2024-25 is expected to be 6%, improving to 6.7% in the second half.
• The 2023-24 growth was notably higher at 8.2% for GDP and 7.2% for Gross Value Added (GVA).

Sectoral Analysis

• Manufacturing sector growth fell sharply from 9.9% in 2023-24 to 5.3% in 2024-25.
• The Gross Fixed Capital Formation rate has stabilized around 33.4% during 2021-22 to 2024-25.

Investment and Government Expenditure

• Investment growth is crucial, with government investment slowing down significantly at (-)12.3% eight months into 2024-25.
• The Government of India’s capital expenditure in the first eight months was 46.2% of the budget target, reaching ₹5.14 lakh crore.
• There is a need to accelerate capital expenditure growth to at least 20% for 2025-26.

Future Growth Prospects

• India's real GDP growth is projected to stabilize at 6.5% over the next five years, according to the International Monetary Fund (IMF).
• Nominal GDP growth is anticipated in the range of 10.5%-11% with an implicit price deflator (IPD)-based inflation of about 4%.
• Achieving a developed country status would require sustained real GDP growth of 6.5% with nominal growth of 10.5%-11% over the long run.

Challenges

Maintaining a growth rate of 6.5% may be challenging as the economic base expands. Early years will require higher growth rates, but the potential growth rate remains at 6.5%.

The article concludes by emphasizing that a 6.4% growth rate in 2024-25, while below the previous year, aligns with India's potential growth rate. 

SVAMITVA Programme Overview

The Union government has undertaken a comprehensive survey of rural land as part of the SVAMITVA programme, initiated by the Panchayati Raj Department.

Survey Details

• The survey covers an area of 67,000 sq km of rural land, valued at ₹132 lakh crore.
• Drones are used for the survey, offering an accuracy of up to five centimetres.
• So far, 92% of the drone mapping is complete, covering 3.17 lakh villages.
• The target is to cover more than 3.44 lakh villages by 2026.

State Participation

• 31 States and Union Territories have joined the scheme.
• Sikkim, Telangana, and Tamil Nadu participated only in the pilot phase.
• Telangana and Bihar have developed their own versions of this scheme.

Benefits of the SVAMITVA Programme

• Helps landowners monetise their land parcels.
• Property cards will be accepted by banks for loan applications.
• Aims to resolve long-standing land disputes.
• Provides clarity on land quantum available with panchayats.
• Enables panchayats to raise money via leasing or build infrastructure like community halls.