India's growth becoming more balanced as private consumption's share in GDP rises
India’s growth is becoming more balanced as private consumption’s share in GDP rose in fiscal 2025
- NEW DELHI — The good news is that India’s growth is becoming more balanced as
private consumption’s share in GDP rose in fiscal 2025, according to a Crisil
report.
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- The mild revision of 10 basis points (bps) in the second
advanced estimate to 6.5 per cent takes the expected real GDP growth this
fiscal closer to the average of 6.6 per cent seen in the decade pre-pandemic.
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- “And this is over a sharp upward revision of 100 bps in the
previous year’s growth to 9.2 per cent,” said Dharmakirti Joshi, Chief
Economist, Crisil.
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- “We expect the GDP growth at 6.5 per cent next fiscal,
supported by normal monsoons, lower food inflation and rate cuts of 75-100
basis points in the current cycle that began earlier this month,” he mentioned.
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- As anticipated, public and household investments were the
faster-growing investment components in fiscal 2024.
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- The financial flexibility and low leverage that corporates
enjoy are yet to translate into healthy investments.
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- The ongoing tariff wars and fear of dumping from China keep
the corporate sector cautious on investments.
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- “The complexity of risks from tariff actions – already
initiated and likely to be followed by more such measures in the coming months
– is evolving and creates a downside bias to our forecasts,” said Joshi.
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- The GDP growth accelerated to 6.2 per cent in the third
quarter (October-December) of 2024-25, up from a revised figure of 5.6 per cent
in the second quarter of the financial year.
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- The growth rate for the financial year 2024-25 is now
estimated at 6.5 per cent while the economic growth rate for 2023-24 has been
revised to a 12-year high of 8.2 per cent.
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- Meanwhile, the fiscal deficit for the first 10 months of the
current financial year (April-January) stood at Rs 11.70 lakh crore or 74.5 per
cent of annual estimates.
