Ministry Of Statistics Sanguine Of Strong Economic Growth; Retains Previous GDP Estimates

New Delhi, Jun 10 (KNN) The Ministry of Statistics remains steadfast in its optimistic outlook for India's economic expansion, projecting no significant downward revision to the official 8.2 per cent GDP growth estimate for the fiscal year 2023-24 (FY24).

Citing the ‘strong momentum’ witnessed in the economy, ministry officials expressed confidence that the GDP growth in FY25 could exceed the 7 per cent mark.

"We don't anticipate any substantial revision – either for gross value added (GVA) or the gross domestic product (GDP)," a ministerial source stated, underscoring the ‘robust’ data compilation methodology for computing national income.

While the National Statistical Office's provisional estimates have drawn scrutiny due to the unusual gap between GDP and GVA growth rates, as well as the relatively subdued consumption growth, ministry officials remain unfazed.

"India's growth momentum is strong, and this fiscal year will likely witness an above 7 per cent growth in GDP," the official remarked, adding that the GVA and GDP wedge in FY25 may be much narrower.

This optimism contrasts with the Reserve Bank of India's projection of 7.2 per cent growth for FY25 and the more conservative estimates from economists, some pegging the growth rate as low as 6.5 per cent.

Experts attribute the previous year's sharp 100 basis point gap between GDP and GVA primarily to higher indirect tax collection and a substantial decline in subsidy expenditure, which contracted by 22 per cent year-on-year in FY24.

Moreover, the low deflator, a consequence of the negative 0.7 per cent wholesale inflation, contributed to boosting real growth figures last year.

However, these factors may not persist in the current fiscal year, potentially leading to a lower GDP print, according to economic analysts.

The statistics ministry, tasked with compiling national income data, employs the benchmark indicator method, drawing from diverse sources such as the Index of Industrial Production, crop output, financial performance of listed companies, cement and steel production, and commercial vehicle sales.

Improved data coverage and revisions by source agencies contribute to subsequent adjustments in these estimates.

(KNN Bureau)