New Delhi- The Indian economy grew by 6.2 per cent in the December quarter, recovering sequentially from seven-quarter lows, but the expansion came in lower than last year and at a time when it faces growing headwinds from the threat of a US tariff war.
The 6.2 per cent growth in gross domestic product (GDP) was higher than a revised reading of 5.6 per cent expansion in the July-September 2024 period, according to data released by the Statistics Ministry on Friday. It was, however, lower than the RBI’s estimate of 6.8 per cent for the period.
For the full 2024-25 fiscal (April 2024 to March 2025), the government now pegs GDP growth at 6.5 per cent, marginally higher than its initial estimate of 6.4 per cent but below the revised growth rate of 9.2 per cent for 2023-24.
The growth in the current fiscal and less than 7 per cent expected in the next will keep India as the fastest-expanding major economy.
Chief Economic Adviser V Anantha Nageswaran said the economic momentum is expected to sustain as exports and a rebound in government and private spending will support growth in the last quarter of the financial year.
The recovery in October-December – the third quarter of the current fiscal – was primarily driven by a revival in government expenditure, keeping the construction GVA elevated, strong rural demand, and buoyant service exports. However, the recovery remains uneven across sectors, with urban demand still showing signs of weakness despite the festive and wedding season boost.
The Rural demand helped offset some of the softness in urban consumption, supported by a strong kharif harvest and robust rabi acreage, as reflected in the private consumption that grew by 6.9 per cent year-on-year.
Suman Chowdhury, Executive Director and Chief Economist at Acuite Ratings and Research, said going forward, India’s growth trajectory will hinge on a broader revival in private investment, stable exports, and a stronger urban demand recovery.
Aditi Nayar of Icra said that while the Q1 GDP growth was revised downwards by 20 bps to 6.5 per cent, that for Q2 FY2025 was revised upwards by an equivalent amount to 5.6 per cent. Given these revisions, the GDP is implicitly estimated to grow by 7.6 per cent in Q4, which “we believe is slightly on the higher side given the global uncertainties surrounding merchandise exports and commodity prices, which would affect corporate margins, as well as subdued prints for sectors such as electricity and coal for January 2025”.
The GDP (gross domestic product) growth was 9.5 per cent in the October-December 2023 quarter, according to the data released by the National Statistics Office (NSO) on Friday.
It also released the second advance estimate for the current fiscal and pegged the economic growth at 6.5 per cent against 6.4 per cent estimated in the first advance estimate released in January.
The manufacturing sector’s output growth, as per the gross value added (GVA), in the third quarter dipped to 3.5 per cent from 14 per cent in the year-ago period.
Mining and quarrying production growth slowed to 1.4 per cent in the third quarter from 4.7 per cent a year ago.
The construction sector growth too slipped to 7 per cent from 10 per cent a year ago.
However, the output of the farm sector increased by an impressive 5.6 per cent during the quarter compared to a growth of 1.5 per cent in the year-ago period.
The national accounts data showed that the electricity, gas, water supply, and other utility services segment grew 5.1 per cent in the third quarter against 10.1 per cent a year earlier.
The GVA growth in the services sector — trade, hotel, transport, communication and services related to broadcasting — was 6.7 per cent during the third quarter against 8 per cent.
Financial, real estate and professional services grew by 7.2 per cent in the third quarter over 8.4 per cent earlier.
Public administration, defence and other services posted 8.8 per cent growth, marginally up from 8.4 per cent in the third quarter of the last fiscal.
“Real GDP or GDP at Constant Prices is estimated to attain a level of Rs 187.95 lakh crore in the financial year 2024-25, against the First Revised Estimate of GDP for the year 2023-24 of Rs 176.51 lakh crore. The growth rate in Real GDP during 2024-25 is estimated at 6.5 per cent as compared to 9.2 per cent in 2023-24,” the NSO statement said.
According to the statement, nominal GDP or GDP at Current Prices is estimated to attain a level of Rs 331.03 lakh crore in 2024-25 against Rs 301.23 lakh crore in 2023-24, showing a growth rate of 9.9 per cent.
The real GDP or GDP at Constant Prices in Q3 of FY 2024-25 is estimated at Rs 47.17 lakh crore over Rs 44.44 lakh crore in Q3 of FY 2023-24, showing a growth rate of 6.2 per cent, it added.
The nominal GDP or GDP at Current Prices in Q3 of FY 2024-25 is estimated at Rs 84.74 lakh crore against Rs 77.10 lakh crore in Q3 of FY 2023-24, registering a growth rate of 9.9 per cent.
The NSO revised upwards the GDP growth for 2023-24 to 9.2 per cent from 8.2 per cent estimated earlier.
“Real GDP or GDP at constant (2011-12) prices for the years 2023-24 and 2022-23 stands at Rs 176.51 lakh crore and Rs 161.65 lakh crore, respectively, showing a growth of 9.2 per cent during 2023-24 compared to a growth of 7.6 per cent during 2022-23,” it said.
Per Capita Income i.e. Per Capita Net National Income at current prices is estimated at Rs 1,69,145 and Rs 1,88,892 respectively for 2022-23 and 2023-24, it noted.
The NSO has also revised GDP estimates for the first and second quarters of this fiscal to 6.5 and 5.6 per cent from 6.7 per cent and 5.4 per cent, respectively.
The economy has expanded 6.1 per cent in April-December 2024 down from 9.5 per cent a year ago.
Meanwhile, The output of eight key infrastructure sectors rose by 4.6 per cent in January against a 4.2 per cent expansion in the same month of last year, according to official data released on Friday.
The key infrastructure sectors’ output had expanded by 4.8 per cent in December 2024.
The Centre’s fiscal deficit touched 74.5 per cent of the annual target at the end of January 2025, according to the data released by Controller General of Accounts (CGA) on Friday.
In actual terms, the fiscal deficit — the gap between expenditure and revenue — was Rs 11,69,542 crore during the April-January 2024-25 period.
The deficit was 63.6 per cent of Revised Estimates (RE) of 2023-24 in the year-ago period. (PTI)