Nirmala Sitharaman, Union Finance Minister
| Photo Credit:
BIJOY GHOSH
With better performance of manufacturing and construction sectors, the Indian economy grew by 7.4 per cent during January-March quarter (Q4) of fiscal year 2024-25 (FY25) against 6.4 per cent during the previous quarter (October-December), per a government report on Friday. However, lower urban demand and tariff uncertainty pose risk to growth outlook during the current fiscal (FY 2025-26).
“India’s growth is holding up in a growth-scarce environment,” Chief Economic Advisor V Anantha Nageswaran said in a media briefing. India also outshone other large and contemporary economies, including China, which grew 5.4 per cent in the period.
Finance Minister Nirmala Sitharaman stressed that India is sustaining growth and remains the fastest-growing economy in the world.
“India’s industry and the manufacturing activity have all been good during Q4 of FY 2024-25 and there was a Real GDP growth of 7.4 per cent in Quarter 4 alone. For the entire FY 2024-25, the Real GDP growth was 6.5 per cent. India is sustaining the growth and it is the fastest growing economy for four years continuously,” Sitharaman said.
While Q4 growth was the highest in four quarters, for the entire fiscal year FY25, it was at a four-year low of 6.5 per cent, slowing down sharply from 9.2 per cent growth recorded in FY24.
During the last quarter, gross value added (GVA), which reflects supply situation in the economy as GDP relates to demand, expanded by 6.8 per cent against 6.5 per cent during October-December quarter (Q3) of FY25. During this period, manufacturing output rose 4.8 per cent compared with a revised expansion of 3.6 per cent in the previous quarter, while construction activity jumped 10.8 per cent, up from 7.9 per cent in the previous quarter.
According to a note by HDFC Bank, the wedge between GDP and GVA is on account of strong growth seen in net taxes (taxes – subsides), as subsidy payout contracted in Q4. Net direct taxes grew by 12.7 per cent, which impacted the real growth number positively.
“Clearly, India’s growth leads global growth, estimated at 3.3 per cent for 2024 by IMF, by a significant margin,” said DK Srivastava, Chief Policy Advisor at EY India.
While the Chief Economic Advisor felt that high frequency economic indicators such as GST collection and Purchasing Managers’ Indices indicate that momentum of the last quarter of FY25 continues in the first quarter of the current fiscal, economists were cautious.
“The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter. We expect benign inflation and soft growth to continue to provide the MPC room for incremental monetary easing, with 25bp cut in the upcoming June policy,” said Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank
Radhika Rao, Senior Economist as DBS Bank expects growth to stabilise around the mid-6 per cent range at the start of FY26, supported by farm output, relief in purchasing power from lower inflation and monetary easing, as well as continued public spending.
“External uncertainties could have an impact through trade and investment channels,” she said.
Published on May 30, 2025
Nirmala Sitharaman, Union Finance Minister
| Photo Credit:
BIJOY GHOSH
With better performance of manufacturing and construction sectors, the Indian economy grew by 7.4 per cent during January-March quarter (Q4) of fiscal year 2024-25 (FY25) against 6.4 per cent during the previous quarter (October-December), per a government report on Friday. However, lower urban demand and tariff uncertainty pose risk to growth outlook during the current fiscal (FY 2025-26).
“India’s growth is holding up in a growth-scarce environment,” Chief Economic Advisor V Anantha Nageswaran said in a media briefing. India also outshone other large and contemporary economies, including China, which grew 5.4 per cent in the period.
Finance Minister Nirmala Sitharaman stressed that India is sustaining growth and remains the fastest-growing economy in the world.
“India’s industry and the manufacturing activity have all been good during Q4 of FY 2024-25 and there was a Real GDP growth of 7.4 per cent in Quarter 4 alone. For the entire FY 2024-25, the Real GDP growth was 6.5 per cent. India is sustaining the growth and it is the fastest growing economy for four years continuously,” Sitharaman said.
While Q4 growth was the highest in four quarters, for the entire fiscal year FY25, it was at a four-year low of 6.5 per cent, slowing down sharply from 9.2 per cent growth recorded in FY24.
During the last quarter, gross value added (GVA), which reflects supply situation in the economy as GDP relates to demand, expanded by 6.8 per cent against 6.5 per cent during October-December quarter (Q3) of FY25. During this period, manufacturing output rose 4.8 per cent compared with a revised expansion of 3.6 per cent in the previous quarter, while construction activity jumped 10.8 per cent, up from 7.9 per cent in the previous quarter.
According to a note by HDFC Bank, the wedge between GDP and GVA is on account of strong growth seen in net taxes (taxes – subsides), as subsidy payout contracted in Q4. Net direct taxes grew by 12.7 per cent, which impacted the real growth number positively.
“Clearly, India’s growth leads global growth, estimated at 3.3 per cent for 2024 by IMF, by a significant margin,” said DK Srivastava, Chief Policy Advisor at EY India.
While the Chief Economic Advisor felt that high frequency economic indicators such as GST collection and Purchasing Managers’ Indices indicate that momentum of the last quarter of FY25 continues in the first quarter of the current fiscal, economists were cautious.
“The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter. We expect benign inflation and soft growth to continue to provide the MPC room for incremental monetary easing, with 25bp cut in the upcoming June policy,” said Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank
Radhika Rao, Senior Economist as DBS Bank expects growth to stabilise around the mid-6 per cent range at the start of FY26, supported by farm output, relief in purchasing power from lower inflation and monetary easing, as well as continued public spending.
“External uncertainties could have an impact through trade and investment channels,” she said.
Published on May 30, 2025
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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