India’s Growth Becoming More Balanced, Says Crisil Report
India’s economic growth is showing signs of becoming more balanced, with private consumption’s share in GDP rising in fiscal 2025, according to a recent Crisil report. The revised second advanced estimate for real GDP growth has been adjusted to 6.5% for the current fiscal year, bringing the growth closer to the pre-pandemic average of 6.6% observed over the past decade.
Dharmakirti Joshi, Chief Economist at Crisil, noted, “This revision comes after a sharp upward revision of 100 basis points in last year’s growth to 9.2%.” He further added that the GDP growth is expected to remain at 6.5% next fiscal, driven by favorable factors such as normal monsoons, lower food inflation, and expected rate cuts of 75-100 basis points in the current monetary policy cycle, which began earlier this month.
In terms of investments, public and household investments were the faster-growing components in fiscal 2024, as expected. However, corporate investments have not seen the same level of growth despite the financial flexibility and low leverage enjoyed by corporates. The ongoing tariff wars, coupled with fears of dumping from China, have kept the corporate sector cautious on investments.
Joshi expressed concern over the risks posed by the ongoing tariff actions, stating, “The complexity of risks from tariff actions – already initiated and likely to be followed by more such measures in the coming months – creates a downside bias to our forecasts.”
India’s GDP growth rate accelerated to 6.2% in the third quarter (October-December) of 2024-25, up from a revised figure of 5.6% in the previous quarter. For the financial year 2024-25, the GDP growth is estimated at 6.5%, while the economic growth for 2023-24 has been revised to a 12-year high of 8.2%.
Regarding fiscal health, the fiscal deficit for the first 10 months of the current financial year (April-January) stood at Rs 11.70 lakh crore, or 74.5% of the annual estimates, reflecting the government’s ongoing efforts to manage fiscal discipline.
