India’s GDP growth likely improved to 6.9% in March quarter: Mint poll
India’s Q4 GDP growth is expected to rise to a four-quarter high of 6.9%. This would take FY25 GDP growth to 6.3%, lower than the second advance estimate of 6.5% by the National Statistical Office in February.
India's economic growth likely rose to 6.9% in the March quarter from 6.2% in the previous quarter, driven largely by robust agricultural activity and service sector exports, according to a median estimate of 22 economists polled by Mint. This would take full-year 2024-25 GDP growth to 6.3%, lower than the second advance estimate of 6.5% by the National Statistical Office in February.
Provisional GDP data for the fourth quarter and FY25 are scheduled to be released on 30 May.
Economists in the poll projected India's GDP growth in a wide range of 6% to 7.5%. However, all but one expected GDP growth in the March quarter to surpass the preceding quarter's reading. The NSO's second advance estimate implied 7.6% growth in the final quarter.
Also read: Govt may revive covid-era credit scheme to boost manufacturing, exports
GDP had grown 6.5% in April-June and 5.6% in July-September.
Whether the full-year GDP growth is 6.3% (as the Mint poll shows) or 6.5% (as per the NSO's second advance estimate), it will be the lowest in four years. GDP growth was 9.7% in FY22, 7.6% in FY23, and 9.2% in FY24.
Also read: India starts FY26 on a strong note, reclaims top spot among EM peers in April
Services boost
According to ICRA chief economist Aditi Nayar, the services sector continued to record double-digit growth in Q4, and a robust increase in the output of most rabi crops may lift agricultural gross value added (GVA) growth. However, a year-on-year decline in merchandise exports amid tariff-led uncertainty and soft expansion in industrial activity may weigh on growth.
What could attract more attention again this year is the gap between GDP growth and GVA growth. Economists expect GVA growth to be lower than GDP growth in Q4 due to the differing trends in subsidy transfer by the government.
GDP is calculated by adding net tax (taxes minus subsidies) to GVA.
“Most of the subsidy transfer in FY25 was front-loaded and therefore Jan-Mar 2025 is likely to see a large contraction relative to Jan-Mar 2024," said Kaushik Das, India chief economist at Deutsche Bank, in a report dated 22 May. "This will boost net tax collection growth significantly and provide a bump to the GDP growth relative to the real GVA growth."
Also read: Centre eyes large dividend from public sector banks in FY25
topics
