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Informist, Tuesday, Jul 23, 2024

 

NEW DELHI – The Union Budget today retained the nominal GDP growth projection for the current financial year started April at 10.5%, the same as in the Interim Budget. In absolute terms, the nominal GDP is estimated at 326.4 trln rupees. 

 

India's nominal GDP grew 9.6% in 2023-24 against the Budget expectation of 10.5%, because of a low GDP deflator.

 

The GDP deflator was just 1.3% last year compared with 6.7% in 2022-23. A GDP deflator measures inflation in the prices of goods and services produced in a country, and largely takes into account WPI inflation, which was in the deflationary zone for most of 2023-24. Economists expect WPI inflation to rise in 2024-25 to near 5%, which would push the GDP deflator higher.

 

The Economic Survey, tabled in Parliament on Monday, projected India's real GDP growth for 2024-25 in the range of 6.5-7.0%. The Reserve Bank of India has forecast India's real GDP growth in 2024-25 at 7.2% compared with 8.2% last year.

 

The nominal GDP assumed in the Budget is crucial as it will determine key targets, including fiscal deficit and tax collections.

 

The government presented an Interim Budget in February as there was a General Election this year. In an Interim Budget, a Vote on Account is passed for a part of the fiscal year, pending the passage of the regular Budget.  End

 

Reported by Shubham Rana and Afra Abubacker

Edited by Saji George Titus

 

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