GDP: India’s GDP growth will be 6.5 percent in fiscal year 2025, Finance Ministry estimates

India GDP: The Finance Ministry has expressed confidence in its monthly review that India’s economy will grow at the rate of about 6.5 percent in the financial year 2025. It also highlights the importance of reforming India’s fiscal responsibility framework to achieve the goal of a developed India by FY 2047-48. The Finance Ministry has said in its monthly review estimates that rural demand remains resilient. This is evident from the increase of 23.2 percent and 9.8 percent in sales of two-wheeler and 3-wheeler vehicles and sales of domestic tractors respectively in October-November 2024.

Urban demand is increasing – Finance Ministry

The Finance Ministry also said that urban demand is increasing, passenger vehicle sales have increased by 13.4 percent year-on-year in October-November 2024 and domestic air passenger traffic has seen strong growth. As a result, the Finance Ministry has expressed hope that the economy will grow at the rate of about 6.5 percent in real terms in the financial year 2025.

In the second quarter July-September of the current financial year 2024-25, the GDP growth rate had fallen to the lowest level in seven quarters at 5.4 percent. The economic growth rate in the previous quarter was 6.7 percent. Due to this, the estimated growth rate figures for the coming quarters are important.

Yesterday’s EY report also showed similar estimates for financial year 2025.

Earlier yesterday, EY’s report came in which it was said that the Indian economy is likely to grow at the rate of 6.5 percent in the current and next financial year. The country’s economic growth rate in the September quarter was much lower than expected i.e. 5.4 percent. This is due to decline in private consumption expenditure and gross fixed capital formation.

The report said that the GDP is estimated to be 5.4 percent in the second quarter of the financial year 2024-25, which is the lowest level in seven quarters. Apart from the fact that private investment demand has not picked up, the growth of government investment expenditure has been negative. There has been a decline of 15.4 percent in the first half of the current financial year.

Also know the EY Economy Watch December forecast

In ‘EY Economy Watch December’ 2024, India’s economic growth rate is estimated at 6.5 percent for the financial year 2024-25 (April 2024 to March 2024 financial year) and financial year 2025-26.

It said a reoriented approach is important for sustainable debt management, eliminating government savings and promoting investment-led growth, which will pave the way for India’s transformation into a developed economy.

EY India’s Chief Policy Advisor D.K. Srivastava said the proposed amendments to the Fiscal Responsibility and Budget Management (FRBM) Act are necessary to enable India to pursue sustainable growth while maintaining fiscal prudence. He said that these changes will not only solve the current challenges but will also open the way for change in India’s developed economy.

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