Strong GDP growth reinforces India’s position as fastest-growing major economy

New Delhi, May 30 (IANS) India’s economy has maintained a steady growth trajectory, with real GDP expanding by 6.5 per cent in FY 2024-25, largely driven by healthy growth in private consumption and capital formation, industry leaders said on Friday. 

In nominal terms, GDP grew by 9.8 per cent, highlighting India’s position as one of the fastest-growing major economies globally, said Hemant Jain, President, PHDCCI.

The Private Final Consumption Expenditure (PFCE) increased by 7.2 per cent, while Gross Fixed Capital Formation (GFCF) rose by 7.1 per cent in Q4, reflecting investment-led momentum.

“GVA growth in Q4 was led by 10.8 per cent growth in construction sector followed by public administration and defence-related services at 8.7 per cent,” Jain noted.

Sectorial trends show that construction emerged as the fastest-growing sector for the full fiscal year (FY2025) at 9.4 per cent, followed by public administration and defence-related services at 8.9 per cent and financial, real estate, and professional services at 7.2 per cent.

Per capita GDP in real terms increased by 5.5 per cent, reaching Rs 1.33 lakh, while per capita Gross National Income stood at Rs 1.31 lakh, marking a 5.4 per cent rise.

“These gains suggest broad-based improvements in economic well-being,” he said.

According to Crisil, the uptick in fourth quarter growth was led by a significant growth in fixed investments even as private consumption growth slowed.

Fixed investment, as measured by gross fixed capital formation (GFCF), picked up substantially in the quarter, led by a continued momentum in government (central plus state) capex in the quarter. Improving domestic consumption is likely to support industrial activity, it said.

Madhavi Arora, Chief Economist, Emkay Global Financial Services, said the Q4 growth print partly reflects the back loaded spending effect of the government, both centre and States, led more by public capex spending.

“As a whole the growth has been in line with the govt estimates, with capital formation staying broadly steady,” she mentioned.

Picture Courtesy: IANS