India's Q4 FY25 GDP growth 6.9%, limiting FY25 expansion to 6.3%: ICRA

The growth in the gross value added (GVA) is estimated to have recorded a relatively milder pick-up to 6.3 per cent in Q4 FY25 from 6.2 per cent in Q3, driven by a slight uptick in the industrial sector (to plus 4.8 per cent from plus 4.5 per cent).

Unless there are material revisions in the data for Q1-Q3 FY25, ICRA projects a sharp step down in the full-year GDP and GVA expansion to 6.3 per cent and 6.2 per cent respectively in FY25 from 9.2 per cent and 8.6 per cent respectively in FY24, driven by industry (to plus 5.3 per cent from plus 10.8 per cent) and services (to plus 7.2 per cent from plus 9 per cent).

This is also lower than the NSO’s second advance estimate of 6.5 per cent for GDP and 6.4 per cent for GVA for FY25.

The GDP-GVA growth wedge is expected to have reverted to positive territory in Q4 FY25 after three quarters.

Based on the available data for the Centre’s indirect taxes and subsidies, ICRA estimates that the growth in net indirect taxes (in nominal terms) rose quite sharply in the quarter from 6.8 per cent in Q3 FY25, aided by a sharp contraction in the government’s subsidy disbursement.

This implies that the GDP growth has witnessed faster improvement in Q4 FY25 relative to that seen in the GVA growth.

ICRA projects the growth in industrial GVA to improve to 4.8 per cent in Q4 FY25 (plus 9.5 per cent in Q4 FY24) from 4.5 per cent in Q3 FY25 (plus 11.8 per cent in Q3 FY24), amid a flattish performance of manufacturing (at plus 3.5 per cent each).

ALCHEMPro News Desk (DS)