All eyes on India GDP numbers: 6.3 or a whopping 7 per cent growth?

While all the buzz on India’s gross domestic product (GDP) is about whether it may or may not have pipped past Japan to become the world’s third-biggest economy, the real growth numbers do matter. Which will be why the nation’s GDP growth in financial year (FY) 2025, to be released by the government on Friday evening, will have all ears agog.

 

Anywhere from a likely 6.3 per cent to perhaps even 7 per cent is what most punters are betting on, with the government’s own second revised estimate earlier this year in February forecasting a growth of 6.5 per cent.

 

Whichever, it will still be the lowest GDP growth in four years.

 

Though the pandemic lockdowns in 2020 saw the nation technically falling into a recession, it had set a blistering pace of growth since then—9.7 per cent in FY 2021, 7.6 per cent in 2023 and 9.2 per cent last year. Though detractors say the phenomenal figures were more due to the low base effect because of the Covid drop, the post-Covid K-shaped economic growth, spurred by massive government spending which saw the business classes raking it in, did catalyse the economy.

 

The figures will be much more tempered down this year. The economy was lacklustre for the most part of the first half of this financial year, with inflation dampening private consumption and no heavy spending by the government due to the long drawn-out general elections in the summer.

 

However, things did improve towards the latter part of the FY. The good monsoon, a stable government despite its coalition nature, and festive season spending helped, while a bountiful harvest saw rural consumption pick up finally after years of post-Covid morass.

 

This showed in the quarterly GDP growth rates. While the first quarter (April to June) GDP was decent enough at 6.5 per cent, the impact of a long summer and acutely low government spending due to the elections showed up in a dismal (by Indian standards) growth rate of 5.6 per cent for the July-to-September period.

 

Then, as the weather turned and the festive season popped up and things started looking with better economic activity, especially in the hinterland, thanks to good farm output following the monsoon, the GDP perked up to 6.2 per cent in Q3 (October to December).

 

Estimates for the final quarter of FY2025 (January to March) from various analysts hover mostly around 7 per cent, while one pessimistic forecast has even put it as low as 6.2 per cent.

 

Put together, these figures are expected to translate into the year’s GDP, clocking in around 6.3 per cent or so.

 

“There is still encouraging news for the Indian economy...despite (being) perplexed with tariff revisions, geopolitical uncertainties and rapid technological developments,” said VP Singh, professor at Great Lakes Institute of Management, Gurugram.

 

“A robust GDP—driven by rising disposable incomes, urbanisation and evolving lifestyle preferences—will energise consumption-driven sectors like automobiles,” Audi India head Balbir Singh Dhillon said. 

 

“For us, sustained economic confidence directly translates into stronger demand, deeper market penetration and long-term growth for the luxury mobility segment. Coming on the back of the growth we witnessed in quarter 1 of this year, this fills us with optimism for the next months,” added Dhillon.

 

However, the bigger worry is over the general consensus that GDP growth will slow down in the coming quarters, leading to a much lower GDP growth rate next year.

 

The tariff uncertainty is directly leading to worries over trade, while urban consumption is still down in the dumps. This week’s unveiling of industrial production at an 8-month low of just 2.7 per cent is indicative of the challenges ahead.

 

Business