GDP growth rises to 6.2% in Q3; FY24 number revised to 9.2%

New Delhi: India’s economic growth accelerated to 6.2% in the quarter ended December 2024 (Q3FY25), from a sluggish 5.6% expansion recorded in the July-September period, supported by increased government expenditure and improvement in rural consumption, as per data released by the National Statistics Office (NSO) on Friday.

For the full financial year 2024-25, the NSO has pegged the gross domestic product (GDP) growth at 6.5%. To achieve this, the growth in the fourth quarter should be 7.6%.

Given the previous three quarters’ data, a projection of 7.6% for Q4 looks unrealistic. However, Chief Economic Advisor V. Anantha Nageswaran is betting on Maha Kumbh to support the growth.

Addressing a virtual media briefing, Nageswaran said huge sums of money being spent on food, accommodation, travel and other sectors by around an estimated 50-60 crore people traveling to Prayagraj for Maha Kumbh is expected to have a sizable impact on consumption expenditure in Q4.

“Hard to put a number to it but Kumbh mela will offer a significant boost to consumption expenditure in the March quarter,” he said. The one-and-a-half month-long celebration of Maha Kumbh held at Prayagraj in Uttar Pradesh concluded on February 26.

Meanwhile, the NSO significantly revised its previous GDP growth projections. The data for FY 2023-24 has been revised upward to 9.2% from 8.2%. This makes economic growth in 2023-24 the highest in the previous 12 years except for 2021-22 (the post-Covid year). This growth has been contributed by double-digit growth rates in Manufacturing (12.3%), Construction (10.4%) and the Financial, Real Estate & Professional Services sector (10.3%), the NSO said in a statement.

For 2022-23, the NSO released the final estimates of GDP pegging the growth at 7.6%.

For the current financial year (2025-25), real GDP growth has been revised upward to 6.5% from the earlier estimate of 6.4%. Q2 growth data, which was earlier pegged at 5.4%, has been revised upward to 5.6%. The current financial year’s Q1 numbers have been revised downward by 13 bps to 6.5%.

Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, said the quarterly numbers of 2024-25 are likely to be revised further in May 2025.

“The mild revision of 10 basis points (bps) in the second advance estimates to 6.5% takes the expected real GDP growth this fiscal closer to the average of 6.6% seen in the decade pre-pandemic,” said Dharmakirti Joshi, Chief Economist at Crisil.

In terms of demand segments, the NSO data confirms that the main reason for the fall in growth from 2023-24 to 2024-25 is the “weakening growth in investment demand which fell from 8.8% to 6.1% and that in government final consumption expenditure which fell from 8.1% to 3.8% in this period,” said DK Srivastava, Chief Policy Advisor, EY India.