India’s Growth Becoming More Balanced with Rise in Private Consumption’s Share in GDP
India’s economic growth is becoming increasingly balanced, as private consumption’s share in the country's Gross Domestic Product (GDP) has risen in fiscal year 2025, according to a recent Crisil report.
New Delhi: India’s economic growth is becoming increasingly balanced, as private consumption’s share in the country’s Gross Domestic Product (GDP) has risen in fiscal year 2025, according to a recent Crisil report.
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GDP Growth Expected at 6.5% for Fiscal 2025
India’s real GDP growth for fiscal 2025 has been revised to 6.5%, marking a slight revision of 10 basis points (bps) in the second advanced estimate. This brings the country’s growth closer to the 6.6% average seen in the decade leading up to the pandemic.
Commenting on the revised growth figures, Dharmakirti Joshi, Chief Economist at Crisil, highlighted that this increase follows a significant 100 bps upward revision of the previous year’s growth to 9.2%. He also forecasted a 6.5% GDP growth next fiscal, driven by factors like normal monsoons, lower food inflation, and anticipated rate cuts of 75-100 bps in the current monetary cycle.
Private Consumption and Investments Drive Growth
The report pointed out that private consumption is playing an increasingly important role in India’s economic growth. Additionally, both public and household investments were the fastest-growing investment components in fiscal 2024. However, despite the financial flexibility and low leverage enjoyed by Indian corporates, corporate sector investments have not been as healthy as expected, largely due to ongoing tariff wars and the fear of Chinese product dumping.
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“The complexities and risks stemming from tariff actions are evolving, leading to a downside bias in our growth forecasts,” noted Joshi.
Third-Quarter Growth Hits 6.2%
India’s GDP growth accelerated to 6.2% in the third quarter (October-December) of fiscal year 2024-25, up from 5.6% in the second quarter. The annual growth rate for 2024-25 is now estimated at 6.5%, while the economic growth for the fiscal year 2023-24 has been revised upward to an impressive 8.2%, a 12-year high.
Fiscal Deficit Update
In another significant development, the fiscal deficit for the first 10 months of the current financial year (April-January) stood at Rs 11.70 lakh crore, accounting for 74.5% of the annual target.
India’s economy is showing positive signs of growth, with private consumption playing a crucial role in supporting long-term economic stability.
