Robust Growth: India’s GDP Shows Strong Momentum with 6.5% Rise in 2024-25

India’s GDP recorded a robust growth of 6.5% in the fiscal year 2024-25, with an impressive 7.4% expansion in the fourth quarter alone, according to official government data released on Thursday. This upbeat economic performance underscores the resilience of the Indian economy amid global uncertainties and domestic structural reforms.

Q4 Boosts Confidence in Economic Outlook

The Q4 growth figure of 7.4% has surpassed expectations and signals a stronger recovery in economic activities, particularly in manufacturing, construction, and financial services. The sharp quarterly rise played a crucial role in lifting India’s GDP to a healthy annual growth rate of 6.5%, reaffirming the country’s position as one of the fastest-growing major economies globally.

Key Sectors Driving India’s GDP

The manufacturing sector saw a notable rebound, supported by strong domestic demand, improved industrial output, and increased private investment. Government capital expenditure also remained high throughout the fiscal year, contributing significantly to the overall growth.

Services, particularly financial, real estate, and professional services, recorded substantial gains. Agriculture, while subdued in the initial quarters due to erratic monsoons, showed recovery in the final half of the year, contributing moderately to India’s GDP growth.

Construction activities gained momentum, supported by housing demand and infrastructure development projects under various government schemes, including PM Gati Shakti and National Infrastructure Pipeline.

Economic Reforms and Consumption Recovery

Reforms such as the Production Linked Incentive (PLI) scheme, labor law simplification, and ease of doing business initiatives have begun to show tangible benefits. The government’s push for digitization and financial inclusion has also enhanced consumer participation and business efficiency, giving further thrust to India’s GDP.

Additionally, household consumption, which accounts for a significant portion of the GDP, showed signs of revival, especially in urban regions. Rural consumption showed marginal improvement due to inflation control and subsidy support from the government.

Inflation and Global Headwinds Managed Prudently

Despite facing inflationary pressures and geopolitical challenges globally, India managed to maintain macroeconomic stability. Timely interventions by the Reserve Bank of India (RBI), including interest rate management and liquidity adjustments, helped in controlling inflation without hampering growth significantly.

The global slowdown, rising interest rates in developed markets, and geopolitical uncertainties such as the Ukraine conflict posed risks. However, India’s domestic demand-driven model and policy resilience kept India’s GDP on a strong footing.

Fiscal Prudence and Investment Climate

India’s fiscal policy remained focused on growth-oriented capital spending while maintaining deficit discipline. The private sector also showed renewed investment interest, particularly in manufacturing, renewable energy, and digital technology.

Foreign direct investment (FDI) inflows remained steady, driven by confidence in long-term growth prospects. The government’s Make in India and Atmanirbhar Bharat initiatives continued to bolster investor sentiment.

Outlook for FY 2025-26

With such positive momentum, economists expect India’s GDP to maintain a steady trajectory in the upcoming fiscal year. Growth projections for FY 2025-26 remain in the range of 6.6% to 7.0%, depending on monsoon performance, global economic conditions, and continued domestic reforms.

Structural factors like young demographics, rising urbanization, and digital transformation are likely to support medium to long-term economic expansion.

Policy Measures to Sustain Growth

To sustain this growth, experts suggest continuous focus on skill development, export diversification, energy security, and climate resilience. Fiscal support for sectors like MSMEs, agriculture, and rural development will also be crucial in ensuring inclusive growth across regions.

The central government has indicated plans to further ease regulatory burdens and improve logistics and connectivity infrastructure—key components for improving competitiveness and pushing India’s GDP higher.

Conclusion

The 6.5% annual growth in India’s GDP for FY 2024-25, reinforced by a stellar 7.4% surge in Q4, reflects a strong economic recovery backed by solid fundamentals and effective policy measures. With encouraging signs across sectors and continued reform momentum, India appears well-positioned to sustain its growth story in the coming years.