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GDP is used to track economy health. It shows the value of all the goods and service created within a fixed time within the country.
The first quarter i.e. April-June 2025 GDP data will be released today on August 29. This time GDP growth is estimated to be 6.7%, which is less than 7.8% in the same quarter of last year.
There are many reasons behind this, such as 50% tariff on India’s exports by US President Donald Trump, reduction in urban demand and lethargy of private investment.
Goldman Sachs says that this may affect India’s GDP growth by 0.3%. Pranjul Bhandari, an economist at HSBC, estimates that GDP growth may be reduced by 0.7%.
RBI retains GDP estimate of FY26 6.5%
On August 6, the Reserve Bank of India retained the estimate of economy growth for FY26 at 6.5% at the Monetary Policy Meeting. The RBI Governor had said- the monsoon season is going well. Also, the festival season is also approaching.
This favorable environment, with the government and the Reserve Bank’s tributary policies, gives a good indication in the near future to the Indian economy. Even though the challenges of global trade remains, geopolitical uncertainties have decreased to some extent.
Changes in GST slab can boost the economy
The Finance Ministry has planned to reduce the GST slab from 4 to 2, so that domestic consumption is promoted. This can provide boost to the economy. In addition, steps such as Moratorium are being considered on export incentive missions and export loans to promote exports.
The condition of GDP for the last 5 years
- 2020: -5.8% (decline due to Kovid-19 epidemic)
- 2021: 9.7% (Indication of Strong Rebound after epidemic)
- 2022: 7.0% (Standing Development)
- 2023: 8.2% (Economic reforms continue)
- 2024: 6.5% (projected growth decrease, still strong growth)
What is GDP?
GDP is used to track economy health. It shows the value of all the goods and service created within a fixed time within the country. It also includes foreign companies that produce by staying inside the country’s border.
There are two types of GDP
There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the calculation of goods and service values is performed at the value or stable price of the base year. Currently, the base year is 2011-12 for calculating GDP. At the same time, the calculation of nominal GDP is done at the current price.
How GDP is calculated?
A formula is used to calculate the GDP. GDP = c+g+i+NX, here C means private conjpction, G means government spending, I mean investment and NX means net export.
Who is responsible for GDP’s grip?
There are four important engines to reduce or increase GDP. The first is, you and us. The more you spend, it contributes to our economy. The second is the business growth of the private sector. It contributes 32% to GDP. The third is government expenditure.
This means how much the government is spending in producing goods and services. It contributes 11% to GDP. And the fourth is, net demand. For this, India’s total exports are reduced by total imports, as India has more imports than exports, so its impact is negative on GPD.
