Union Finance Minister Nirmala Sitharaman during an interview with PTI, in New Delhi, on September 7, 2025.
| Photo Credit: PTI

Growth in the manufacturing sector quickened to 7.7% in the April-June 2025 quarter, coming on top of a high base of 7.6% in the same quarter of the previous year. File
| Photo Credit: Getty Images

India’s economic growth rate in the first quarter (April-June) of the current financial year quickened to a five-quarter high of 7.8%, driven by a cross-sector acceleration including in manufacturing, construction and services. 

Growth in the Gross Domestic Product, as shown by the data released by the Ministry of Statistics and Programme Implementation on Friday (August 29, 2025), was last quicker during the quarter ended March 2024. 

Growth in the manufacturing sector quickened to 7.7% in the April-June 2025 quarter, coming on top of a high base of 7.6% in the same quarter of the previous year. This was also faster than the 4.8% growth the sector saw in the January-March 2025 quarter.

The construction sector, too, saw growth coming in at 7.6% in Q1 of this financial year, on a high base of 10.1% in Q1 of last year. The electricity, gas, water supply & other utility services sector, however, saw growth slow sharply to 0.5% in Q1 of this financial year, from 10.2% in the same quarter of the previous year.

The quarter’s GDP growth was also propelled by the services sector, which on a combined basis grew 9.3% in the April-June 2025 quarter, faster than the 6.8% seen in the same quarter of last year, or the 7.3% growth in the immediately preceding quarter. 

Within this, the Public Administration, Defence & Other Services sector saw the growth accelerating to a three-year high of 9.8% in Q1 of 2025-26, coming on top of a 9% growth in Q1 of the previous year. 

The Financial, Real Estate & Professional Services sector grew at 9.5% in Q1 of 2025-26, a two-year high. Similarly, the Trade, Hotels, Transport, and Communication Services sector grew at 8.6%, also a two-year high.

READ MORE

Photo used for representation purpose only.
| Photo Credit: Sushil Kumar Verma

The story so far:

It has been what one may call, a bittersweet year for the economy, with a sweet first half, when growth surprised everyone, including the government. And a difficult latter half by the end of which the Reserve Bank of India (RBI) and Finance Ministry mandarins are sparring, as diplomatically as possible, over who is to be blamed for sputtering growth, a persistently resurgent inflation trajectory and the flux this creates for policy making.

Why is there a clamour for a rate cut?

Top government functionaries have been making noises since late November about the need for RBI to cut rates, with some suggesting it should ignore volatile food prices and prioritise growth and investments. The reason for their seemingly urgent pitches became clearer when the Q2 GDP numbers revealed a 7-quarter low growth of 5.4%, with urban demand tottering and showing up in underwhelming corporate results that also affected market sentiment.

How were things this time last year?

India’s stock markets were at record highs, the Gross Domestic Product was reported to have risen 7.7% in the first half of 2023-24, from 7.2% a year earlier. The Finance Ministry expected growth to be “over 6.5%” for the full year, as it geared up for an interim Budget ahead of the Lok Sabha polls. The RBI was expected to start an interest rate cut cycle in the second half of 2024 as it had projected inflation to average 4% — its median target — through July-September.

But didn’t the economy do far better in 2023-24?

Yes, the National Statistical Office (NSO) growth estimates for 2023-24 turned out to be way healthier than all projections, partly because of revisions in earlier quarters’ numbers. The first half of 2023-24 was reckoned to have grown around 8.1%, followed by an 8.6% spike between October and December 2023 (third quarter, or Q3), a 7.8% growth in the first three months of 2024. 2023-24 had ended up with a remarkable 8.2% uptick. The first quarter of 2024-25 was largely taken up by the election process. The BJP suffered some reverses, but attained 240 seats in the Lok Sabha and the NDA returned to office with a little help from some allies, and a semblance of continuity was maintained in the cabinet, especially for key economic portfolios like Finance and Commerce.

What did the post-poll Budget offer?

In the full Union Budget for 2024-25 presented in July, Finance Minister Nirmala Sitharaman ramped up references to employment and the middle class and unveiled schemes to spur skilling and job creation with some token tax cuts for income tax payers, that were hoped to alleviate the effects of inflation and boost consumption. While a sustained consumption pick-up was necessary to stimulate greenfield and brownfield private investments, Ms. Sitharaman acknowledged that public spending on infrastructure had to lead the way yet again this year and announced a ₹11.11 lakh capex plan. The government exuded confidence that India would record its fourth successive year with 7% or higher growth, since COVID-19 had tripped the economy.

How did things pan out?

The first growth data for 2024-25, released after the Budget, showed GDP had risen at a five-quarter low of 6.7%. However, this didn’t ring any alarm bells at the time — the prolonged polling process had affected capital spending plans by the Centre and the States which effectively scuppered a major growth lever. The mood was still upbeat but some had begun to worry. “Growth moderated in the April-June quarter as high interest rates temper urban demand,” said Louis Kuijs, Asia-Pacific chief economist at S&P Global Ratings in September. The firm expected India to grow 6.8% this year at the time, well below the 7.2% projected by the RBI. After the Q2 growth shock, many have pared their 2024-25 growth projections down, including the Finance Ministry which now expects it to be around 6.5%, while some worry India has entered the throes of a prolonged cyclical slowdown.

Meanwhile, though consumer price inflation remained under 6% through most of the year, it didn’t get near the RBI’s goal till July when it hit a five-year low of 3.5%, followed by another benign print in August. Yet, rate cut hopes in the October monetary policy review were scotched by food prices that shot up, starting in September, lifting the headline inflation closer to 6% again. With food prices still a worry and edible oils spurting up, the RBI did not budge on interest rates this month as well, even as it noted the growth-inflation situation is no longer well-poised, slashing its 2024-25 growth projection to 6.6% from earlier hopes of 7.2%.

With slowing growth and high inflation, what next?

While high interest rates hurt demand and lower rates will help private consumption and, in turn, investments too, inflation hurts consumption spending as well. The government has appointed a new Governor at the RBI, but a change of guard may not suffice for a rate cut in February as inflation needs to ebb quickly too. That North Block and Mint Street are not seeing eye to eye on who needs to blink first to break this growth-inflation flux was apparent as the year drew to a close. An RBI article made a solid case for ‘excoriating inflation now’ to get consumption, growth and investment going on a strong footing. The latest economic review by the Finance Ministry, in turn, sought to blame the “monetary policy stance” for some of the recent demand slowdown. The growth and inflation rebalancing act, therefore, will be the one to watch out for in 2025, apart from any surprises the next U.S. President throws up.

India’s July-September growth slides: what options does RBI have? | Business Matters

| Video Credit:
The Hindu

Economic growth fell sharply to 5.4% for the quarter ended September. The important question is, what next?

Are we looking at a prolonged slowdown? And as importantly, will the Reserve Bank cut rates, something that observers have been expecting it to do for a while so that lower borrowing costs may spur growth? Or will the latest inflation print of a high 6.2% force its hand to maintain status? 

Presentation and direction: K. Bharat Kumar

Video: Thamodharan B.

Editing: Shibu Narayan

Bhubaneswar:

The slowing of India’s economic growth to a 15-month low of 6.7 per cent in the April-June quarter was due to “lower” government spending in the wake of the enforcement of the model code of conduct for the recent Lok Sabha polls, RBI Governor Shaktikanta Das said on Saturday.

The RBI had projected a growth rate of 7.1 per cent for the April-June quarter of this fiscal.

“The Reserve Bank projected a growth rate of 7.1 per cent for the first quarter. However, the first advance estimation data released by the National Statistical Office showed the growth rate at 6.7 per cent,” Governor Das said.

The components and main drivers responsible for the GDP growth like consumption, investment, manufacturing, services and construction have registered a growth of more than 7 per cent, he said.

Only two aspects have pulled the growth rate slightly down. Those are—government (both central and state) expenditure and agriculture, the RBI governor pointed out.

He said the government expenditure was low during the first quarter perhaps due to elections (April to June) and operation of model code of conduct by the Election Commission.

“We would expect the government expenditure to pick up in coming quarters and provide the required support to growth,” Mr Das said.

Similarly, the agriculture sector has recorded a minimal growth rate of around 2 per cent in the April to June quarter. However, the monsoon was very good and spread all over India except a few areas. So, everyone is optimistic and positive about the agriculture sector, he noted.

“Under these circumstances, we have reasonably confident expectations that the annual growth rate of 7.2 per cent projected by the RBI will be materialized in coming quarters,” the governor asserted.

Das said that GST, inflation targeting framework and Insolvency & Bankruptcy Code (IBC) are the three major reforms made during the past 10 years.

Addressing a national conference of chartered accountants (CAs) here, he said, “The primary functioning of the RBI, as defined in its preamble, is to maintain price stability, while keeping in mind the objective of growth. This was a major structural reform made by the government in 2016 by amending the RBI Act.” With this amendment, the RBI is mandated by the law to maintain the price stability with keeping the inflation at 4 per cent, with a leeway of 2 percentage points on either side, he said.

When Covid hit, the RBI reduced the repo rate by 250 basis points. Similarly, after the Ukraine war started, due to various international factors and some domestic weather events, the inflation rose to 7.8 per cent. So, at that time, the central bank had quickly increased the interest rate, he pointed out.

Stating that quality of audit in any organization is very important Das advised the CAs to do a true diagnosis of the health of a company like doctors.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

India’s gross domestic product slowed to a quarter low of 6.7 per cent in April-June this fiscal against 8.2 per cent in the year-ago period, mainly due to poor showing by the farm sector, shows government data.

Growth in Asia’s third-largest economy had been well above 7 per cent during previous quarters.

The previous GDP low was 6.2 per cent in January-March 2023.

India remains the fastest-growing major economy, as China’s GDP growth in the April-June quarter was 4.7 per cent.

The agriculture sector recorded a 2 per cent growth, down from 3.7 per cent in the April-June quarter of 2023-24, as per the National Statistical Office (NSO) data released on Friday.

However, the growth in the manufacturing sector accelerated to 7 per cent in the first quarter of the current fiscal compared to 5 per cent in the year-ago period.
 

New Delhi:

Minister of State for Finance Pankaj Chaudhary said that the first Union Budget of the third Modi government will be based on his mantra of “Sabka Saath Sabka Vikas.” Finance Minister Nirmala Sitharaman will present the full budget for 2024-25 on Tuesday.

“This budget is based on PM Modi’s mantra of Sabka Saath Sabka Vikas,” MoS Chaudhary said.

Chaudhary was among the first members of FM Nirmala Sitharaman’s team to reach the North Block offices of the Finance Ministry ahead of the budget presentation. Vivek Joshi, Secretary of the Department of Financial Services, and Chief Economic Advisor V. Anantha Nageswaran have also reached the ministry ahead of FM Sitharaman.

Minister Sitharaman is set to present the Union Budget 2024 in Parliament today, marking her seventh consecutive budget and eclipsing the late Moraji Desai’s record of six consecutive budgets, which is likely to focus on changes in the income tax structure and improving the ease of doing business in India. Sitharaman tabled the Economic Survey 2023-24 along with the statistical appendix on Monday.

Sitharaman will lay on the table a statement (in English and Hindi) of the estimated receipts and expenditures of the government for the year 2024-25 in the Rajya Sabha.

She will table the budget one hour after the conclusion of the presentation of the Union Budget 2024-25 in the Lok Sabha.

The Finance Minister also laid on the table, under subsection (1) of Section 3 of the Fiscal Responsibility and Budget Management Act, 2003, a copy each (in English and Hindi) of the following papers: medium-term fiscal policy strategy statement and macro-economic framework statement. The Finance Minister will further lay on the table statements (in English and Hindi) of the estimated receipts and expenditures (2024-25) of the Union Territory of Jammu and Kashmir (with the legislature).

With this upcoming budget presentation, Finance Minister Nirmala Sitharaman will surpass the record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964 as finance minister. The budget session of Parliament began on July 22 and, according to schedule, will end on August 12.

On Monday, the Economic Survey tabled in Parliament conservatively projected India’s real GDP growth of 6.5-7 per cent, cognizant of the fact that market expectations are on the higher side. Real GDP growth is the reported economic growth minus inflation.

India’s real GDP grew by 8.2 per cent in 2023-24, exceeding the 8 per cent mark in three out of four quarters. According to official data from the Indian government, the country’s GDP grew by an impressive 8.2 per cent during the financial year 2023-24. India’s economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively.

Mumbai:

India is at the threshold of a major structural shift in its growth trajectory, highlighted Shaktikanta Das, Reserve Bank of India Governor, on Tuesday during his address at the 188th AGM (Annual General Meeting) of Bombay Chamber of Commerce & Industry.

The governor added that India is moving ahead towards 8 per cent GDP growth in a sustained manner, adding that the average growth India recorded in the last three years is 8.3 per cent.

“If you look at the average growth India recorded over the three years, the average comes to 8.3 per cent and the current year we have given a projection of 7.2 per cent growth,” said the Governor.

He also stated that during the last year, the Indian economy has contributed a major share to the global economy and called it an achievement for India.

“Indian economy in the last financial year 2023-24 contributed to 18.5 per cent of the global growth, i.e., 18.5 per cent of the global growth was driven by India. It is an achievement; it was much lower 7 or 8 years ago and I think the IMF projects this growth to go up,” he said.

He highlighted that the major drivers of this growth are the implementation of GST, the Insolvency and Bankruptcy Code, and Flexible Inflation Targeting.

“The main drivers of this growth, particularly in the last three years, are the various structural reforms which have been undertaken and several other policy initiatives that have been undertaken in the country, including GST,” he added.

Highlighting the importance and achievements of GST, the governor added, “It (GST) has the advantage of avoiding the multiplicity of taxes. GST is one of India’s biggest structural reforms since 1947.”

He added that GST has settled down in India well because there are instances where some countries have rolled back GST after implementation. But now GST collections have touched 1.7 lakh crore in a month and it is in a range of 1.5 to 1.7 lakh crore every month.

He also shared that India is poised to become the third-largest economy from the current fifth-largest

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Congress leader Jairam Ramesh
| Photo Credit: PTI

As financial markets went for a tumble on June 4 after the trends of the Lok Sabha poll results showed that the BJP was not getting a majority on its own, the Congress said the markets were given an artificial booster dose by the exit polls and have now turned turbulent.

The Congress also recalled the words of former Prime Minister Manmohan Singh in 2004 to say that the party is committed to an orderly and healthy development of the financial markets that reflect the fundamentals of the economy.

For constituency-wise real-time updates, visit our Election Results page

Congress general secretary Jairam Ramesh said the party-led United Progressive Alliance (UPA) government provided a fear-free and intimidation-free 10-year period (2004-14) for the private sector that helped the country achieve its highest Gross domestic product(GDP) growth.

“Financial markets that were given an artificial booster dose by the exit polls are turbulent today. In this context, it is wise to recall the words of Dr. Manmohan Singh on May 17th 2004, the last occasion on which the markets were faced with prospect of such regime change,” Mr. Ramesh said in a post on X.

Recalling Mr. Singh’s words, he said, “There is absolutely no need for panic in the market. Very soon the alliance will unveil its Current Market Price[CMP]. The CMP will demonstrate the commitment of the United Progressive Alliance to fiscal discipline, realistic growth-oriented tax policies, control of unproductive and wasteful public expenditure and increased emphasis on agricultural growth, education, health, food security and social security in the context of a fast-growing economy that is integrating with the world as well.” “The Congress is committed to the orderly and healthy development of the financial markets that reflect the fundamentals of the economy. Our tax policies and foreign direct investment regime will be pro-growth and will create an environment favourable for both Indian and foreign enterprises,” Mr. Ramesh said, quoting Mr. Singh’s words.

Election Results 2024: NDA leading in 12 seats with less than 1% vote margin, in 16 seats with 1-2.5%

He added that what followed in 2004 was a “fear-free and intimidation-free decade for the private sector — a decade of the highest GDP growth India has ever seen, along with the highest private investment as a share of GDP”.

Early trends of the Lok Sabha poll results on June 4 threw up disappointing results for the BJP-led NDA, which appears to be losing big in its strongholds of Uttar Pradesh, Haryana and Rajasthan, although it is expected to form the government with about 290 seats.

 The Reserve Bank’s Annual Report for 2023-24 said that the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment.
| Photo Credit: REUTERS

Indian economy is likely to grow at 7% in the current fiscal year starting April, the Reserve Bank of India (RBI) said in its annual report released on May 30.

The Indian economy, it said, expanded at a robust pace in 2023-24 (April 2023 to March 2024 financial year), with real GDP growth accelerating to 7.6% from 7.0% in the previous year – the third successive year of 7% or above growth.

“The real GDP growth for 2024-25 is projected at 7.0% with risks evenly balanced,” it said.

India’s GDP growth is robust on the back of solid investment demand which is supported by healthy balance sheets of banks and corporates, the government’s focus on capital expenditure and prudent monetary, regulatory and fiscal policies, the RBI said. The Reserve Bank’s Annual Report for 2023-24 said that the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment.

Indian economy, the report said, is well-placed to step up growth trajectory over the next decade in an environment of macroeconomic and financial stability.

“As headline inflation eases towards the target, it will spur consumption demand especially in rural areas,” it said.

It further said the external sector’s strength and buffers in the form of foreign exchange reserves will insulate domestic economic activity from global spillovers.

The report, however, added that geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements and erratic weather developments pose downside risks to the growth outlook and upside risks to the inflation outlook.

The RBI also emphasised that the Indian economy would have to navigate challenges posed by rapid adoption of AI/ML (artificial intelligence/machine learning) technologies as well as recurrent climate shocks.

The annual report is a statutory report of RBI’s central board of directors. The report covers the working and functions of the Reserve Bank of India for the April 2023-March 2024 period.