India GDP Data highlights: FY25 fiscal deficit 100.5% of revised target of Rs 15.7 lakh crore

Aditi Nayar, chief economist, ICRA:

"In Q4 FY2025, manufacturing, construction, financial real estate and professional services, and public administration, defense, etc logged a healthier pace of growth relative to our projection."

"However, private consumption growth eased, and likely remained uneven, while government final consumption expenditure contracted in the fourth quarter of fiscal 2025, after a gap of two quarters."

"While fiscal 2026 has begun with heightened uncertainty around global trade policies, the outlook for domestic drivers of growth, including private consumption and government investment appears largely resilient."

Upasna Bhardwaj, chief economist, Kotak Mahindra Bank:

"The Q4 GDP numbers are marginally higher than our expectations but broadly tracking the government's earlier estimate. The GVA estimate however remain more tepid at 6.8%."

"Expectedly, the high net indirect tax growth has led to the wide gap between the two. The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter."

"We expect the benign inflation and soft growth to continue to provide the MPC room for incremental monetary easing, with 25 basis points cut in the upcoming June policy."

CEA Ananth Nageswaran: Manufacturing systemic reforms will show results over time. Manufacturing is a struggle globally in face of aggressive external competition. Time taken by various policy initiatives may take longer

The top economist further said the conditions are steady for growth in April-June.

Sujan Hajra, chief economist and executive director, Anand Rathi Group:

"This impressive performance comes despite heightened geopolitical tensions and global trade uncertainties. With this momentum, India retains its position as the world's fastest-growing major economy and remains firmly on track to become the fourth-largest economy by the end of fiscal 2026."

"Looking ahead, we expect India's growth to remain resilient and robust at 6.5% in fiscal 2026."

India's fiscal deficit for FY25 breached its revised target, hitting 100.5 percent of Rs 15.696 lakh crore.

Chief economic advisor Ananth Nageswaran on May 30 warned that the global growth may take a beating in 2026 amid rising uncertainty. However, Nageswaran said, "Amid geopolitical uncertainties, India’s growth is very good."

Chief economic advisor Ananth Nageswaran on May 30 said the gross foreign direct investment in India remains steady while the foreign portfolio investments show volatility. "External environment does not pose any risk to FDI inflows," he said.

Morever, Nageswaran said the Mospi survey shows reluctance to share private capital formation plans.

Chief economic advisor Ananth Nageswarn on May 30 said potential conditions are in place for India's fiscal stability. The top economist pointed out that the food inflation has eased and the IMD has predicted a "well-spaced out" monsoon.

CEA Ananth Nageswaran: India is holding up its growth numbers much better than some advanced economies in a growth-scarce environment. Momentum in economic activity that picked up in the fourth quarter continues in April.

Chief economic advisor Ananth Nageswaran on May 30 said India has outshined other major economies still recovering from Covid in terms of real GDP, which stood at 6.5% for FY25.

Moreover, the top economist said the country's private consumption share rose to the highest level since FY04. "Private consumption holding on very well," he said.

India's government-led consumption expenditure fell sharply in the January to March period of FY24 -1.8 percent against a growth of 6.6 percent in the year-ago period, government data showed.

In addition, private consumption too fell marginally to 6 percent in the fourth quarter over 6.2 percent in the year-ago period.

However, the gross fixed capital formation witnessed a growth of 9.4 percent compared to 6 percent a year ago.

India Jan-Mar private consumption growth 6.0% vs 6.2% year ago

Madhavi Arora, lead economist at Emkay Global, Mumbai:

"The fourth-quarter growth print partly reflects the back loaded spending effect of the government, both centre and states, led more by public capex spending."

"Fiscal 2026 will be impacted by global uncertainties weighing on near term investment intentions, while easing urban incomes will weigh on private consumption."

"However, a part of this could be countered by continued monetary easing on both policy rates and regulatory frameworks, even as the fiscal policy will have limited growth-pushing levers through conventional easing."

India on May 30 revised the GDP data for the second and third quarters of FY25. The July to September period data was revised down to 5.6 percent from the earlier 5.8 percent, while the October to December growth rate saw an upward revision to 6.4 percent from the 6.2 percent earlier.

India on May 30 said the January to March quarter saw the services sector grow at a rate of 7.3 percent against 7.8 percent in the year-ago period.

Sakshi Gupta, principal economist at HDFC Bank, on the GDP data:

"The GDP print for Q4 is higher than expected. This indicates that the economy has recovered from the slowdown seen in the middle of last year."

"The outlook for fiscal 2026 continues to face global headwinds on account of tariff uncertainties and global growth slowdown. We continue to expect GDP growth of 6.3% for fiscal year 2026. This hinges on a continued recovery in domestic demand and support from both monetary and fiscal stimulus."

"The print does little to change our view of the RBI policy next week where the central bank is expected to cut the policy rate by 25 basis points. Given global headwinds, the central bank is expected to remain growth supportive."

The mining sector grew at a rate of 2.5 percent in the January to March quarter of FY25, compared to 0.8 percent in the same period of the previous financial year, govt data showed. The construction sector recorded a growth of 10.8 percent in the reported quarter over  8.7 percent a year-ago.

India on May 30 lowered FY25 nominal GDO growth estimate to 9.8 percent from 9.9 percent in the year ago.

India on May 30 said the growth of gross value added (GVA) slipped to 6.8 percent in the fourth quarter of FY25 from 7.3 percent in the year-ago period. For the full year, India's GVA growth stood at 6.4 percent against 8.6 percent in FY24, data showed.

India recorded a GDP growth of 7.4 percent in the fourth quarter of FY25 against an estimate of 6.8 percent, government data showed on May 30. For the full year, the GDP growth stood at 6.5 percent, the data showed.

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JP Morgan expects March quarter GDP growth to grow 7.5% year-on-year, while GVA growth is seen lower at 6.7% compared to 6.2% in the previous quarter, according to CNBC-TV18.

"GDP growth is expected to recover in Q4FY25 from the previous quarter driven by an improvement in consumer demand, government spending and healthy agriculture performance," said Sakshi Gupta, principal economist, HDFC Bank.

“GDP data is likely to look strong optically even as underlying growth should be lower and in vicinity of 6.5%. Centre subsidy payout is likely to be down sharply based on budget estimates and that will boost the net indirect tax component thereby boosting GDP growth compared to GVA growth,” said Abhishek Upadhyay, senior vice-president & economist at ICICI Securities PD.

While the rural economy is expected to shine, which will also contribute to better performance on consumption front, experts indicate that manufacturing is set to lag.

"Manufacturing sector growth is expected to be subdued with non-financial listed companies profit growth similar to Q3," said Gaura Sengupta, chief economist, IDFC First Bank.

India’s industrial production dipped to a four year low of 4.1 percent in FY25 compared with 6 percent in the previous fiscal. Construction goods production lagged at 6.7 percent compared with 9.9 percent in the previous fiscal, as states and centre pulled back on capex.

"Within services, moderation is expected in public services, with slowdown in Centre’s and state government revenue expenditure (ex. Interest and subsidies). Real estate services are also expected to see some moderation with weakness in stamp duty collection," Sengupta added.

India’s economy is likely to fall short of the 6.5 percent estimate set by the second advance estimate, settling at 6.3 percent for FY25. Forecasts by analysts polled by Moneycontrol pegged the growth estimate between 6.2 percent and 6.4 percent for FY25, with median fixed at 6.3 percent.

Indian economy is set to log the fastest rate of growth in four quarters in Q4FY25 with GDP rising 6.9 percent, buoyed by consumer demand and agriculture performance, according to a Moneycontrol poll of 20 economists.

“GDP growth is expected to recover in Q4FY25 from the previous quarter driven by an improvement in consumer demand, government spending and healthy agriculture performance,” said Sakshi Gupta, principal economist, HDFC Bank. (Read more)

The Indian economy recovered in the December quarter to grow at 6.2 percent after sinking to a seven-quarter low of 5.6 percent in the July-September period, according to data released on February 28.

The third quarter number was a tad below the MC poll median of 6.3 percent but helped retain the full-year forecast of 6.5 percent, according to second advance estimates.

"The sequential uptick was led by a pickup in the growth of private and government consumption and a narrower drag on account of net exports, even as that in gross fixed capital formation eased marginally between these quarters," said Aditi Nayar, chief economist, Icra.