India's real gross domestic product (GDP) grew at 6.2% in the third quarter of the financial year 2025, as per the Ministry of Statistics and Programme Implementation. This marks an improvement over the Q2 growth rate of 5.6%.
The ministry has attributed this acceleration primarily to strong rural demand, supported by favourable monsoon conditions and increased government spending.
Private Final Consumption Expenditure (PFCE) is also expected to register a good growth of 7.6% during FY25 as compared to 5.6% growth observed during FY24, reflecting a rebound in consumer spending.
Furthermore, during FY25 construction sector is estimated to observe a growth rate of 8.6%, followed by financial, real estate and professional services’ sector at 7.2% and trade, hotels, transport, communication and services related to broadcasting’ sector at 6.4%.
The growth rate projection of real GDP for FY25 has been revised to 6.5% from 6.4%.
Notably, the government has revised the real GDP growth for FY24 from 8.2% to 9.2%, which is the highest in the previous 12 years except for FY22.
"This growth has been contributed by double-digit growth rates in ‘Manufacturing’ sector [12.3%], ‘Construction’ sector [10.4%] and ‘Financial, Real Estate & Professional Services’ sector [10.3%]," the official statement read.
"The rural real wage growth (for agriculture) remained positive for the second straight quarter in Q3FY25. All this is gradually allowing the consumption demand to get broad-based with the lower income-bracket catching up as the demand remains better even the average growth of 5.2% YOY during 2QFY23-2QFY25," says Paras Jasrai, senior economic analyst at India Ratings and Research.
The World Bank's Economic Memorandum on India report released hours before the GDP results noted that India needs to expand at an average growth rate of 7.8% over the coming decades to become a high-income country by 2047.
"For India to become a high-income economy by 2047, its GNI [Gross National Income] per capita would have to increase by nearly 8 times over the current levels; growth would have to accelerate further and to remain high over the next two decades, a feat that few countries have achieved," the World Bank said.
