Is India’s GDP Growth Reinforcing Its Status as the Fastest-Growing Major Economy?
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Synopsis
India’s economy is on an impressive growth path, achieving a real GDP increase of 6.5% for FY 2024-25. This growth is driven by strong private consumption and capital formation, positioning India firmly among the world's fastest-growing major economies.
Key Takeaways
- Real GDP grew by 6.5% in FY 2024-25.
- Nominal GDP expanded by 9.8%.
- Private consumption increased by 7.2%.
- Investment-led growth was evident in GFCF with a 7.1% rise.
- Construction sector led with 10.8% growth in Q4.
New Delhi, May 30 (NationPress) India’s economy continues to exhibit a robust growth pattern, with real GDP increasing by 6.5 percent in the fiscal year 2024-25. This growth is primarily fueled by strong advancements in private consumption and capital formation, according to industry leaders who spoke on Friday.
In nominal terms, GDP surged by 9.8 percent, underscoring India’s status as one of the fastest-growing major economies worldwide, as highlighted by Hemant Jain, President of PHDCCI.
The Private Final Consumption Expenditure (PFCE) saw an increase of 7.2 percent, while the Gross Fixed Capital Formation (GFCF) grew by 7.1 percent in Q4, indicating a solid investment-driven momentum.
“The growth in GVA during Q4 was propelled by a remarkable 10.8 percent rise in the construction sector, followed closely by public administration and defence-related services at 8.7 percent,” Jain elaborated.
When examining sectorial trends, construction emerged as the leading sector for the entire fiscal year (FY2025) with 9.4 percent growth, followed by public administration and defence services at 8.9 percent and financial, real estate, and professional services at 7.2 percent.
Moreover, the per capita GDP in real terms rose by 5.5 percent, reaching Rs 1.33 lakh, while the per capita Gross National Income reached Rs 1.31 lakh, marking a 5.4 percent increase.
“These advancements indicate widespread enhancements in economic well-being,” he remarked.
Crisil reported that the uptick in growth for the fourth quarter was significantly influenced by a notable rise in fixed investments, even amid a slowdown in private consumption growth.
Fixed investment, measured by gross fixed capital formation (GFCF), saw substantial growth in the quarter, driven by ongoing momentum in government (central plus state) capital expenditure. Improving domestic consumption is anticipated to bolster industrial activity, the report indicated.
Madhavi Arora, Chief Economist at Emkay Global Financial Services, stated that the Q4 growth figures reflect the delayed spending effects of the government, both at the center and state levels, largely stemming from public capital expenditure.
“Overall, the growth aligns with government estimates, with capital formation remaining relatively stable,” she noted.
Point of View
India's economic growth is a testament to resilient policy measures and strategic investments. The diverse sectors contributing to this growth reflect a stable trajectory that could further enhance the nation's economic landscape. As we advance, it's crucial to maintain focus on sustainable development and equitable economic benefits for all citizens.
NationPress
21/09/2025
Frequently Asked Questions
What is the GDP growth rate for India in FY 2024-25?
India's real GDP is projected to grow by 6.5% in FY 2024-25.
What sectors contributed to India's GDP growth?
The construction sector, public administration, and defence-related services were key contributors to GDP growth.
How much did private consumption increase?
Private Final Consumption Expenditure (PFCE) increased by 7.2% in Q4.
What is Gross Fixed Capital Formation?
Gross Fixed Capital Formation (GFCF) rose by 7.1% in Q4, indicating strong investment momentum.
What is the significance of per capita GDP growth?
Per capita GDP in real terms increased by 5.5%, indicating improved economic well-being for individuals.
