India’s GDP Slows to Seven-Quarter Low of 5.4% in Q2 2024-25: NSO Report
In a recent report by the National Statistical Office (NSO), India’s Gross Domestic Product (GDP) has recorded a growth rate of 5.4% for the second quarter of the financial year 2024-25. This marks the lowest growth rate in the past seven quarters, highlighting a slowdown in the country’s economic recovery. Despite being lower than anticipated, this growth is indicative of the challenges facing India’s economy amid global and domestic factors.
Reasons Behind the Slowdown
The slowdown in India’s GDP growth has been attributed to several key factors, including weak industrial output, slow recovery in the manufacturing sector, and subdued consumer demand. The services sector, which has been a major driver of growth in recent years, also showed signs of deceleration. While agriculture showed resilience, contributing positively to the GDP, the overall performance of the economy has raised concerns among analysts and policymakers.
Impact on Government and Policy Making
This slowdown is significant for the Indian government as it continues to focus on achieving sustainable economic growth. The lower-than-expected growth rate has put pressure on fiscal policies and government spending, especially with elections around the corner. Policymakers will need to address issues such as inflation, unemployment, and global economic instability, which have all contributed to the slowdown.
Why This News is Important
Impact on Government Policies and Reforms
India’s GDP growth rate is a crucial indicator of the country’s economic health and serves as a benchmark for evaluating the success of government policies. A slowdown in GDP growth calls for a reassessment of ongoing reforms and initiatives aimed at boosting economic activity. For students preparing for civil services exams like IAS, understanding the implications of such economic data is crucial for current affairs sections, especially those related to economic policies, planning, and governance.
Implications for Economic Sectors
The deceleration in GDP growth impacts various sectors of the economy, including agriculture, industry, and services. For candidates appearing for exams related to economics, it is important to understand how different sectors contribute to the GDP and how their performance can influence national economic outcomes. Knowledge of this will help candidates in answering questions related to India’s economic structure and policies.
Historical Context: Background on India’s GDP and Economic Growth
India’s GDP growth has fluctuated significantly over the years, influenced by both global economic conditions and domestic challenges. After the COVID-19 pandemic, India’s economy faced a massive contraction, followed by a sharp recovery as lockdowns were lifted and vaccination efforts increased. However, this recovery has not been uniform across all sectors. While the services sector rebounded quickly, sectors such as manufacturing and agriculture have been slower to recover.
The NSO’s GDP data for the second quarter of 2024-25 suggests that the initial post-pandemic growth phase has now stabilized, and the economy faces challenges such as inflation, a global slowdown, and domestic policy adjustments. The economic slowdown during this period is not isolated but part of a broader trend seen across many emerging economies as they navigate post-pandemic recovery.
Key Takeaways from ‘India’s GDP Slows to Seven-Quarter Low of 5.4% in Q2 2024-25’
| Serial No. | Key Takeaway |
|---|---|
| 1 | India’s GDP growth for Q2 2024-25 stood at 5.4%, marking the lowest growth in seven quarters. |
| 2 | The slowdown is attributed to weak industrial output and slow recovery in manufacturing. |
| 3 | Consumer demand and the services sector showed signs of deceleration. |
| 4 | The government faces pressure to address inflation, unemployment, and economic reforms. |
| 5 | Policymakers must adjust fiscal and monetary policies to ensure sustainable economic growth. |
Important FAQs for Students from this Newsv
What is India’s GDP growth for Q2 2024-25?
India’s GDP growth for the second quarter of 2024-25 is recorded at 5.4%, marking the lowest growth rate in seven quarters.
What are the main reasons for the GDP slowdown?
The slowdown in GDP growth has been attributed to weak industrial output, slow recovery in the manufacturing sector, and subdued consumer demand.
Which sectors contributed to the GDP growth in Q2 2024-25?
The services sector showed signs of deceleration, while agriculture remained resilient and contributed positively to the GDP.
How does this GDP growth impact India’s economy?
The lower-than-expected GDP growth puts pressure on fiscal policies, government spending, and national economic recovery efforts, especially amid global uncertainties.
Why is this GDP report important for students preparing for government exams?
The GDP report provides insights into the economic situation of India, which is essential for students preparing for competitive exams like IAS, where economic policies, fiscal management, and economic growth are key topics.
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