Gross Domestic Product (GDP) reflects the economy of any country. According to data released by the government on the evening of November 29, the country’s GDP fell to a two-year low of 5.4 percent. This decline in GDP was seen due to poor performance in the manufacturing and mining sectors. However, despite this, India remains the fastest growing major economy in the world. In the same period a year ago, the country’s GDP grew by 8.1 percent. In the April-June 2024 quarter, it was 6.7 percent.
GDP slowed to 5.4 percent
According to recent data, the country’s economy grew at a slow rate of 5.4 percent in the July-September quarter of the financial year 2024-25. Earlier, the previous low level of GDP growth was 4.3 percent in the October-December quarter of the financial year 2022-23. China’s GDP growth was 4.6 percent in the July-September quarter. Not only this, PFSI, which shows consumer spending, came down to 6 percent in the September quarter. Earlier it was at 7.4 percent in the June quarter. Let us know what is GDP and what does it mean to decline in it?
Meaning of decline in GDP
If there is a decline in GDP data, it means that the country’s economy is slowing down. This shows that the country did not produce enough goods compared to last year and there was also a decline in the service sector. When GDP declines, it simply means that production in the country is decreasing. This affects the income, employment and lifestyle of the people. The country’s Central Statistics Office (CSO) assesses GDP four times a year. GDP is assessed every three months. GDP growth data is also released every year. It is important for India to achieve GDP growth year after year so that the needs of the country’s growing population can be met.
Why is it important for the common man?
GDP is important for the common man because it proves to be an important decision-making factor for the government and the people. Increasing GDP means that the country’s economic activities are going well and government policies are proving effective at the ground level. In simple language, it means that the country is moving in the right direction.
But if there is a decline in GDP, it means that the government needs to focus on its policies. So that it can help in bringing the economy back on track. When the economy performs well, people invest more money and increase production. But due to the decline in GDP, people start saving money. In such a situation, the government gives money to the people through different schemes to encourage more spending. So that they spend more and economic growth is boosted.
What was the condition of which sector?
The reason for the decline in GDP was the negative performance of manufacturing, mining and service sectors. The growth rate of financial, real estate and professional services increased and it increased to 6.7 percent, which was 6.2 percent in the quarter a year ago. Electricity, gas, water supply and other public-centric services grew by 3.3 percent, which is much less than the 10.5 percent growth a year ago. The construction sector registered a growth of 7.7 percent in the second quarter, which is less than 13.6 percent in the same quarter last year.
What did the experts say?
Chief Economic Advisor V Anantha Nageshwaran said on these figures of the economy, ‘GDP growth of 5.4 percent shows its low level, which is disappointing. But there is something good in it too.’ He said that the performance of agriculture and related sectors and the construction sector has been very good in this quarter. According to NSO data, the gross value added (GVA) of the agriculture sector was 3.5 percent in the last quarter, which was 1.7 percent in the same period a year ago.
