These numbers will serve as the foundation for key decisions in the upcoming Union Budget 2025.
The data will include both real GDP (adjusted for inflation) and nominal GDP (at current prices). Nominal GDP is critical because it forms the basis for several budget calculations, such as the fiscal deficit and tax revenue as a percentage of GDP.
Also Read | RBI projects FY25 GDP growth at 6.6%
Here’s how it works:
MOSPI estimates the total value of goods and services produced at current prices for the full year.
This is then adjusted to reflect 2011-12 prices, giving the real GDP.
Based on the nominal GDP figure, the government forecasts growth for the next year, derives key metrics like the fiscal deficit, and plans budget allocations accordingly.
This makes the advanced GDP estimates a crucial first step in the budget-making process.
What economists are predicting
According to a poll conducted by CNBC-TV18, economists expect the real GDP to grow by 6.3% this year. This is slightly below earlier projections of 6.4% and lower than the Reserve Bank of India’s (RBI) estimate of 6.6%. In comparison, India’s real GDP grew by 8.2% last year.
The poll also suggests that nominal GDP will grow by 9.9%, bringing the total to approximately ₹324.5 lakh crore. This is slightly lower than the government’s assumption in the 2023-24 (FY24) Budget, which projected a 10.5% growth to ₹326.3 lakh crore.
Implications for the fiscal deficit
If MOSPI’s nominal GDP estimate of ₹324.5 lakh crore is accurate, the fiscal deficit for FY25 will have to be adjusted. The original projection of ₹16.3 lakh crore will likely need to be reduced to around ₹15.9 lakh crore to maintain the fiscal deficit as a percentage of GDP.
The government will use this data to project GDP growth for 2025-26 (FY26) and formulate budgetary targets.
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(Edited by : Shweta Mungre)
First Published: Jan 7, 2025 1:11 PM IST
