Blitz Bureau
NEW DELHI: India’s GDP growth is expected to increase to 6.9 per cent in Q4 FY2025 from 6.2 per cent in Q3 FY2025 despite the enhanced global uncertainty due to the US tariff turmoil during the quarter, according to an ICRA report released on May 19. The report also highlights an increase in consumer sentiment in both the rural and urban areas.
ICRA chief economist Aditi Nayar said, “In a quarter characterised by enhanced uncertainty on the global front, ICRA estimates India’s GDP growth to have risen to 6.9 per cent in Q4 FY2025 from 6.2 per cent in Q3 FY2025. Both private consumption and trends for investment activity were uneven in Q4 FY2025, with the latter partly owing to tariff-related uncertainty.”
While the robust increase in the output of most rabi crops is likely to have boosted the agri-GVA growth in Q4 FY2025, the tepid pace of expansion in the industrial volume growth as well as the deterioration in the performance of several service-sector indicators is expected to have weighed on the GVA growth of these segments,” she added.
Based on the available data for the Centre’s indirect taxes and subsidies, ICRA estimates that the growth in net indirect taxes rose quite sharply in the quarter from 6.8 per cent in Q3 FY2025, aided by a sharp contraction in the Centre’s subsidy disbursement (-33 per cent in Q4 FY2025 vs. +31.1 per cent in Q3 FY2025.
Against the backdrop of trade-related uncertainty triggered by the US tariffs, India’s investment activity showcased a mixed trend in Q4 FY2025. The year-on-year performance of six of the 11 investment-related high-frequency indicators improved in Q4 over Q3, mostly pertaining to the construction sector, including infrastructure/construction goods’ output, cement production, and finished steel consumption.
Additionally, state-investor meets in Madhya Pradesh, Kerala, Karnataka, and West Bengal pushed up project announcements to record levels of Rs 19.2 lakh crore in Q4 FY2025 (vs Rs 16.1 lakh crore in Q4 FY2024).
The Centre’s capex in Q4 FY2025 reflected in the revised budget estimate, would imply a healthy YoY growth of around 21 per cent during the quarter.
