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Govt leaves India FY25 GDP growth estimate unchanged at 6.5%
This story was originally published at 18:17 IST on 30 May 2025
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--Govt leaves FY25 GDP growth estimate unchanged at 6.5%
NEW DELHI – The Indian economy grew 6.5% in the financial year ended Mar. 31, the National Statistical Office said Friday, leaving the growth estimate unchanged from the previous view. GDP growth for 2024-25 (Apr-Mar) was at a four-year low but was higher than the consensus estimate. According to an Informist poll, GDP was seen growing 6.3% in FY25. India's GDP grew 9.2% in FY24.
The gross value added grew 6.4% in FY25, same as estimated earlier. GVA rose 8.6% in the previous year. Nominal GDP grew 9.8% in FY25 compared with the previous estimate of 9.9%. India's GDP growth in FY25 was largely driven by construction sector and public administration, defence and other services, data showed.
Construction sector grew 9.4% in FY25, while public administration, defence and other services grew 8.9%, the government said in a release. The construction sector had grown 10.4% in FY24 while public administration, defence and other services had grown 8.9%.
Within the three broad sectors, services sector did the best, growing 7.2% in FY25, but lower than the 9% growth rate in the previous year. Following public administration, defence and other services' growth of 8.9%, financial, real estate and professional services grew 7.2% although lower than the 10.3% growth seen last year. Trade, hotels, transport, communication and services related sector grew 6.1% in FY25, also lower than 7.5% growth rate in FY24.
Industry, which was the brightest spot in FY24, slowed down sharply to 5.9% from 10.8% last year. Within industry, manufacturing sector grew just 4.5% as against 12.3% the previous year.
Agriculture sector did better than FY24, growing 4.6% in FY25 as against 2.7% in FY24. But, it is to be noted that agriculture sector had grown at a five year low in FY24, thereby becoming a low base.
On the expenditure side, private final consumption expenditure grew 7.2%, higher than 5.6% the previous year. Government consumption, however, came down sharply to 2.3% from 8.1% in FY24. Gross fixed capital formation, an indicator of investments in the economy, grew 7.1% in FY25, lower than the 8.8% growth seen in FY24.
"Consumption growth outpaced GDP, primarily driven by robust rural demand supported by a strong agricultural sector," said Dharmakirti Joshi, Chief Economist, Crisil. "A sharp catchup in investment growth in the last quarter also brought annual investment growth above GDP growth," he added.
India's GDP growth rose to a four-quarter high of 7.4% in the quarter ended March, thanks to higher government capital expenditure and a pick-up in construction activity, data released by the statistics ministry showed.
Consumption will remain robust in FY26, buoyed by favorable domestic factors such as normal monsoon patterns, the transmission of interest rate cuts by the Reserve Bank of India, and middle-class income tax benefits, Joshi said. While the latter two factors are expected to bolster urban consumption and complement the strong rural demand, investment demand is likely to remain sluggish, as elevated uncertainty will dampen corporate investment appetite, and public investment is planned to grow at a slower rate compared to FY25, he added. "Net-net we expect India's GDP grow at 6.5% in FY26 with risks tilted downwards," he said.
The following table gives the latest growth rates under the current GDP series:
| YEAR | REAL GDP GROWTH RATE | NOMINAL GDP GROWTH RATE |
| 2012-13 | 5.5% | 13.8% |
| 2013-14 | 6.4% | 13.0% |
| 2014-15 | 7.4% | 11.0% |
| 2015-16 | 8.0% | 10.5% |
| 2016-17 | 8.3% | 11.8% |
| 2017-18 | 6.8% | 11.0% |
| 2018-19 | 6.5% | 10.6% |
| 2019-20 | 3.9% | 6.4% |
| 2020-21 | (-)5.8% | (-)1.2% |
| 2021-22 | 9.7% | 18.9% |
| 2022-23 | 7.6% | 14.0% |
| 2023-24 | 9.2% | 12.0% |
| 2024-25 | 6.5% | 9.8% |
End
Reported by Priyasmita Dutta
Edited by Akul Nishant Akhoury
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