India's economy remained on a strong growth trajectory in the 2024–25 financial year with a real GDP growth of 6.5%, as per leading industry captains on Friday. The growth was mainly driven by healthy trends in private consumption and capital expenditure.
In nominal terms, GDP growth was 9.8%, making India one of the fastest-growing major economies in the world, stated Hemant Jain, President, PHD Chamber of Commerce and Industry (PHDCCI).
Statistics indicate that in the last quarter of FY25, Private Final Consumption Expenditure (PFCE) was up by 7.2%, whereas Gross Fixed Capital Formation (GFCF) was up by 7.1%, indicating strong investment activity across sectors.
GVA expansion in Q4 was driven by 10.8 per cent expansion in construction sector followed by 8.7 per cent expansion in public administration and defence-related services," Jain further added.
Observing the sectoral pattern for the entire fiscal, construction emerged with a maximum expansion at 9.4%, followed very closely by public administration and defence-related services at 8.9%, and financial, real estate, and professional services at 7.2%.
On the earnings side, real per capita GDP increased by 5.5%, to ₹1.33 lakh. At the same time, per capita Gross National Income rose by 5.4%, to ₹1.31 lakh—numbers Jain stated are indicative of "broad-based improvements in economic well-being."
Rating agency Crisil said that Q4 GDP growth acceleration was mainly supported by a sharp pick-up in fixed investment, while private consumption softened slightly. It explained this increase through steady capital spending by the central and state governments.
"Fixed investment, as recorded through gross fixed capital formation (GFCF), gained considerably in the quarter, with a sustained momentum in government (central and state) capex in the quarter. Increasing domestic consumption is likely to underpin industrial activity," said the agency.
Echoing a similar view, Madhavi Arora, Chief Economist at Emkay Global Financial Services, said Q4 performance reflected a significant push in public spending during the latter part of the year.
“As a whole the growth has been in line with the govt estimates, with capital formation staying broadly steady,” Arora remarked.
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