India’s GDP growth is expected to climb to 6.9% in the fourth quarter of fiscal year 2025 (Q4FY25), marking the fastest pace in four quarters. This bounce comes thanks to stronger consumer demand and good performance in agriculture, according to a Moneycontrol poll of 20 economists.
But hold your applause—while the last three months show promise, the overall growth for FY25 is likely to land at 6.3%. That’s shy of the 6.5% target set earlier this year. The government had hoped for a 7.6% growth in Q4 to hit that mark. Spoiler alert: it won’t quite get there.
What does this mean for you and me?
Well, a 6.9% GDP growth in Q4 hints that more people are spending and farmers are doing well. This could mean better job opportunities and steadier prices, especially in rural areas.
But it’s not all smooth sailing. Manufacturing and industrial production are lagging, which could keep some wheels from turning at full speed.
Sakshi Gupta, principal economist at HDFC Bank, explains, “GDP growth is expected to recover in Q4FY25 due to improved consumer demand, government spending, and healthy agriculture.” Meanwhile, Abhishek Upadhyay from ICICI Securities notes that subsidies paid by the government will make GDP numbers look better than the actual growth, thanks to higher indirect tax collections.
The industrial side is less cheerful. Manufacturing growth is sluggish, and industrial production slipped to a four-year low of 4.1% in FY25, down from 6% the previous year. Construction goods also slowed, reflecting reduced government spending on infrastructure.
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In services, public spending is cooling, and real estate is feeling the pinch, with weaker stamp duty collections hinting at less buying and selling activity. This paints a picture of an economy that’s growing, but cautiously.
Looking ahead, experts predict that India’s GDP will continue growing at 6.3% in FY26, steady but below the Reserve Bank of India’s (RBI) 6.5% estimate and above the International Monetary Fund’s 6.2% forecast. With the RBI likely to cut rates again soon, borrowing could become cheaper, giving the economy a nudge.
If India’s growth was a movie, FY25 would be the sequel that’s decent but not a blockbuster. The rural economy is the star player, but manufacturing and public services are the supporting cast that needs to step up.
For those who love deep dives, the government will release official Q4 and FY25 data on May 30. Meanwhile, keep an eye on how the RBI’s rate cuts play out—lower rates usually mean more spending and investment, which could spice up the plot next fiscal year.
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