India's GDP grew 6.2% in Q3 FY25, rebounding from 5.6% in Q2. Agriculture led growth, while manufacturing and mining lagged, NSO data shows
New Delhi: In line with the economists’ expectations, India’s economy regained the momentum in the December quarter, with its gross domestic product or GDP growing at 6.2 per cent, after slipping to a seven-quarter low of 5.6 per cent in the preceding July-September period. Compared to the last fiscal in the October-December 2023 period, the GDP growth was 9.5 per cent, the government data said on Friday.
As per the data released by the National Statistical Office (NSO), the country’s economic growth rate stood at 6.2 per cent in the October-December quarter this fiscal mainly due to poor performance by mining, manufacturing and all other sectors, with the exception of agriculture. "However, on a sequential basis, the economic growth rate in the third quarter showed significant improvement over the second quarter," it said.
As per the NSO data, real GDP or GDP at constant prices is estimated to attain a level of Rs 187.95 lakh crore in the financial year 2024-25, against the first revised estimate of GDP for the year 2023-24 of Rs 176.51 lakh crore. “The growth rate in Real GDP during 2024-25 is estimated at 6.5 per cent as compared to 9.2 per cent in 2023-24. The nominal GDP or GDP at current prices is estimated to attain a level of Rs 331.03 lakh crore in 2024-25 against Rs 301.23 lakh crore in 2023-24, showing a growth rate of 9.9 per cent,” the data showed.
“The real GDP or GDP at constant prices in Q3 of FY 2024-25 is estimated at Rs 47.17 lakh crore over Rs 44.44 lakh crore in Q3 of FY 2023-24, showing a growth rate of 6.2 per cent. The nominal GDP or GDP at current prices in Q3 of FY 2024-25 is estimated at Rs 84.74 lakh crore against Rs 77.10 lakh crore in Q3 of FY 2023-24, registering a growth rate of 9.9 per cent,” the data showed.
Reacting to the data, chief economic advisor (CEA) V Anantha Nageswaran said that India's economy must accelerate to 7.6 per cent in the fourth quarter to reach a full-year growth target of 6.5 per cent. “Hard to put a number to it but Kumbh mela will offer a significant boost to consumption expenditure in the March quarter. Maha Kumbh saw huge sums of money being spent on food, accommodation, travel and other sectors. This is expected to have a sizable impact on consumption expenditure in Q4”, he added.
Citing geopolitical uncertainties, the CEA said, “We should not be held hostage by global uncertainties and Indian economic momentum will sustain irrespective of them. On the agriculture front, crop production is set to remain robust. Besides, the private sector needs to ramp up investments and there is no uncertainty about Indian demand. The income-tax cut announced in the Budget will help consumption as well.”
Amid a market downturn, the CEA is hopeful that it will rebound soon. On the investment front, he agreed that private investment in real terms is very low, but while it is rebounding, there is room to do more given the high demand. “India sees continued active interest from investors in India. Legacy investors have been using the extremely buoyant Indian stock market until recently to generate profits on old investments. Inflation is trending down, which was distorted by a few items like food and gold,” the top economist said.
The NSO also released the second advance estimate for the current fiscal and pegged the economic growth at 6.5 per cent against 6.4 per cent estimated in the first advance estimate released in January. “The manufacturing sector’s output growth, as per the gross value added (GVA), in the third quarter dipped to 3.5 per cent from 14 per cent in the year-ago period. Mining and quarrying production growth slowed to 1.4 per cent in the third quarter from 4.7 per cent a year ago, while the construction sector growth too slipped to 7 per cent from 10 per cent a year ago,” the data showed.
However, the output of the farm sector showed an impressive growth by 5.6 per cent during the quarter compared to a growth of 1.5 per cent in the year-ago period. “But, the electricity, gas, water supply, and other utility services segment grew 5.1 per cent in the third quarter against 10.1 per cent a year earlier. Financial, real estate and professional services also grew by 7.2 per cent in the third quarter over 8.4 per cent earlier. The GVA growth in the services sector -- trade, hotel, transport, communication and services related to broadcasting -- was 6.7 per cent during the third quarter against 8 per cent,” the data showed.
