Budget opportunity to arrest growth deceleration

India aspires to be a developed country by 2047.

- BS Ghuman

According to NITI Aayog's projection, India's gross domestic product (GDP) will reach $30 trillion by that year, assuming an annual real GDP growth rate of over 9%. However, the economy's rate of growth is pegged significantly low at 6.4% in 2024-25 as compared to 8.2% in 2023-24, which will be a four-year low. India cannot afford a deceleration in growth rate as it would cast a shadow on the dream of becoming a developed economy.

Poor performance in the manufacturing, mining, major service sectors and sluggish investment have been the main factors responsible for the deceleration. The manufacturing sector is estimated to grow at 5.3% in 2024-25 as compared to 9.9% in 2023-24. The growth of the mining sector decelerated from 7.1% in 2023-24 to 2.9% in 2024-25. Construction and trade-related sectors witnessed a decline in the rate of growth from 9.9% to 8.6% and 6.4% to 5.8%, respectively. Other sectors that suffered were electricity, gas, water and utility services from 7.5% to 6.8% and financial services from 8.4% to 7.3%. The losing momentum of these sectors is worrisome and needs to be addressed as a priority in the Union Budget 2025-26.