In a major boost to India’s economic narrative, the Gross Domestic Product (GDP) for the financial year 2024-25 surged to 6.5%, reinforcing the nation’s position as one of the fastest-growing major economies in the world. According to official data released by the Ministry of Statistics and Programme Implementation, the fourth quarter (Q4) of FY 2024-25 saw an impressive 7.4% growth rate, exceeding most economists’ projections.
Agriculture Leads the Way
A significant contributor to this strong performance was the agriculture sector, which grew by 4.6% for the year—up sharply from 2.7% in the previous fiscal year. This remarkable growth is attributed to favorable weather conditions and improved farming practices, following a challenging year of erratic monsoons. Notably, Q4 witnessed a 5% growth in agriculture, compared to just 0.8% in the same quarter last year. Higher rural incomes, in turn, boosted consumer demand across various segments.
Infrastructure Push Fuels Construction Boom
The construction sector emerged as another key growth engine, expanding by 9.4% during FY 2024-25. In Q4 alone, the sector saw a stunning 10.8% rise, fueled by massive government spending on infrastructure development. Investments in highways, railways, smart cities, ports, and airport modernization projects provided a robust foundation for economic activity and job creation.
Services Sector Stays Strong
The services sector, particularly ‘Public Administration, Defence & Other Services’, posted an 8.9% annual growth rate, while ‘Financial, Real Estate & Professional Services’ grew by 7.2%. These figures suggest healthy demand for business services and public sector expansion.
In Q4, the services momentum continued, with the public administration sector growing by 8.7% and the financial and professional services sector registering a 7.8% rise. This sector-wide growth points to an improving business environment, rising urban demand, and ongoing digital transformation.
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Consumption and Rural Demand on the Rise
Private Final Consumption Expenditure (PFCE)—a major driver of GDP—rose by 7.2% in FY 2024-25, up from 5.6% in the previous year. Experts attribute this to a resurgence in rural demand, driven by increased farm incomes and government subsidies, coupled with steady employment generation in urban and semi-urban regions.
A Bright Outlook Despite Global Headwinds
India’s economic resilience is shining bright amid global uncertainty. While other economies struggle with inflation, geopolitical tensions, and trade disruptions, India is charting a growth-centric path. The International Monetary Fund (IMF) forecasts India to be the only major economy likely to register over 6% GDP growth in 2025-26, thanks to stable macroeconomic fundamentals, rising exports, and a thriving startup ecosystem.
With sectors aligned and demand picking up, India is poised to continue its journey towards becoming a $5 trillion economy.