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Building on a strong base
May 31, 2025
|Hindustan Times Jammu
The takeaway from the latest GDP numbers is that India's macroeconomic fundamentals remain sound. Policymakers deserve credit for this
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The Indian economy grew at 6.5% in the fiscal year 2024-25 and 7.4% in the quarter ending March 2025. Both these numbers are higher—the latter much more than the former—than the 6.3% and 6.8% projection by a Bloomberg poll of economists. Is the state of the economy much better than what the pundits thought it to be? A more informed answer requires looking beyond the headline print. Gross Value Addition (GVA) growth in the quarter ending March 2025 is 6.8% compared to the Gross Domestic Print (GDP) print of 7.4%. This means that fiscal consolidation, most likely a reduction in subsidy payments, has generated significant tailwinds for the GDP. To be sure, the GVA and GDP growth difference is much lower (0.1 percentage point) in the 2024-25 annual number.
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