India’s Growth Stabilizes With Rising Private Consumption In Fiscal 2025

According to a Crisil report, India’s economic expansion is becoming more balanced, with private consumption playing a larger role in GDP growth.

The report noted a slight upward revision of 10 basis points (bps) in the second advanced estimate, bringing the expected real GDP growth for fiscal 2025 to 6.5%. This aligns closely with the pre-pandemic decade’s average growth rate of 6.6%.

Dharmakirti Joshi, Chief Economist at Crisil stated, “And this is over a sharp upward revision of 100 bps in the previous year’s growth to 9.2 percent.”

“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 further asserted.

Public and household investments were the primary growth drivers in fiscal 2024, as expected.

However, despite financial stability and low debt levels, corporate investments have yet to see a significant boost.

Concerns over tariff disputes and the possibility of increased imports from China have made businesses cautious about committing to major investments.

“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,” Joshi noted.

Quarterly & Annual Growth Outlook

India’s GDP growth picked up pace in the third quarter (October-December) of 2024-25, reaching 6.2%, up from a revised 5.6% in the previous quarter.

For the full financial year 2024-25, growth is now likely at 6.5%, while the economic expansion for 2023-24 has revised to 8.2%, marking the highest level in 12 years.

Meanwhile, the fiscal deficit for the first 10 months of the current financial year (April-January) stood at ₹11.70 lakh crore, accounting for 74.5% of the annual target.

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