India’s economic system could have recorded its slowest annual development in 4 years at 6.5% in FY25, however a sharper-than-expected 7.4% surge within the March quarter suggests the engine remains to be operating robust. Chief Financial Advisor V Anantha Nageswaran attributed the resilience to sturdy home demand and a spike in personal consumption, now at its highest share of GDP since FY04.
“The financial momentum, which picked up within the March quarter, additionally continued in April,” Nageswaran mentioned, reinforcing optimism a few steady, low-inflation development path. With easing rates of interest on the horizon, the groundwork, he added, is being laid for a steady-growth-low inflation situation.
“We retain our development outlook between 6.3-6.8% for FY26, ” Nageswaran mentioned, including that personal consumption holding up effectively.
The CEA highlighted a sequence of alerts supporting the upbeat outlook: capital items imports are regular, infrastructure items output is rising, and the city unemployment fee is on the decline. “City employment fee coming down,” he famous, underlining labor market enhancements.
In opposition to a backdrop of world uncertainty and projections of slowing worldwide development in 2025 and 2026, India has seen comparatively smaller forecast downgrades. “Whereas some nations are going through stagflation dangers, India is witnessing a benign growth-inflation setting,” Nageswaran mentioned.
The federal government’s earnings tax reduction measures in Funds 2025 are additionally anticipated to gas shopper spending, particularly in cities. “Revenue tax reduction could have a constructive impression on consumption this fiscal, particularly in city India,” he added.
Talking on the leap in Covid instances, the CEA mentioned he does not count on rising Covid-19 instances to result in any drawback (economically).
Whereas India’s GDP development accelerated to 7.4% within the final quarter of 2024-25, the general fiscal 12 months variety of 6.5% was a 4-year low. In 2023-24, India’s GDP grew by a formidable 9.2 per cent, persevering with to be the fastest-growing main economic system. In keeping with official information, the economic system grew 8.7 per cent and seven.2 %, respectively, in 2021-22 and 2022-23.
