India’s economy outperforms expectations with a robust 7.4% growth in Q4 FY 2024-25, though the full-year estimate of 6.5% marks a four-year low, reflecting mixed sectoral dynamics.
New Delhi: On May 30, 2025, India’s Q4 GDP growth for FY 2024-25 was reported at 7.4%, surpassing forecasts of 6.7%, as per the National Statistics Office (NSO). However, the full-year Real GDP growth is estimated at 6.5%, the lowest since the COVID-affected FY 2020-21, compared to 9.7% in FY 2021-22, 7.6% in FY 2022-23, and 9.2% in FY 2023-24.
Strong Q4 Performance Amid Annual Slowdown
The Q4 Real GDP reached ₹51.35 lakh crore, up 7.4% from ₹47.82 lakh crore in Q4 FY 2023-24, while Nominal GDP grew 10.8% to ₹88.18 lakh crore. For FY 2024-25, Real GDP is projected at ₹187.97 crore, a 6.5% rise from ₹176.51 lakh crore, with Nominal GDP up 9.8% to ₹330.68 lakh crore. Real GVA for the year grew 6.4% to ₹171.87 lakh crore, and Nominal GVA rose 9.5% to ₹300.22 lakh crore, reflecting steady but slower annual growth.
Sectoral Growth Highlights
Construction led sectoral growth at 9.4% for FY 2024-25, surging to 10.8% in Q4, driven by infrastructure projects like the Bharat Expressway and UDAN initiative. Public Administration, Defence & Other Services grew 8.9% annually and 8.7% in Q4, buoyed by increased government spending. Financial, Real Estate & Professional Services recorded 7.2% annual growth and 7.8% in Q4, supported by robust FDI inflows, with the services sector attracting 16% of total FDI in 2024, per a December 2024 India Briefing report. The Primary Sector improved to 4.4% annually and 5.0% in Q4, up from 2.7% and 0.8% last year, due to strong kharif output.
Demand-Side Dynamics and Challenges
Private Final Consumption Expenditure (PFCE) rose 7.2% in FY 2024-25, up from 5.6%, reflecting stronger consumer spending post the 2025 Union Budget’s tax stimulus, which Deloitte estimated could boost GDP by 0.6-0.7%. Gross Fixed Capital Formation (GFCF) grew 7.1% annually and 9.4% in Q4, driven by infrastructure investments. However, challenges persist, with household debt rising to 5.8% of GDP and financial savings dropping to 5.3% in FY 2023, per a StudyIQ report, signaling urban consumption stress.
Mixed Economic Outlook
Despite the Q4 uptick, the 6.5% full-year growth has sparked debate. Chief Economist Madan Sabnavis noted that rural demand, fueled by agricultural growth, remains a key driver, but urban stress and geopolitical risks, including US tariff uncertainties, could shave 0.1-0.3% off GDP, per Deloitte. Posts on X reflect optimism, with users like
@iamvanshsoni calling the growth “remarkable,” though some economists caution that the annual figure may still fall short of the NSO’s estimate by 20-30 basis points, citing weaker corporate earnings and manufacturing slowdowns earlier in the year.
