New Delhi: India’s real GDP is projected to grow at 6.4% in FY 2024-25, while the nominal GDP is expected to rise by 9.7%, according to the first advance estimates released by the National Statistics Office. The nominal GDP growth for FY 2025-26 has been pegged at 10.1%, reflecting sustained economic momentum.
The government has revised the fiscal deficit target to 4.8% of GDP for FY 2024-25, reaffirming its commitment to fiscal consolidation. The target for FY 2025-26 is set below 4.5% of GDP, in line with earlier commitments. The revenue deficit is also on a declining trend, expected to reduce from 4.8% in FY 2024-25 to 4.4% in FY 2025-26.
Retail inflation remained within the RBI’s 4% ±2% target band during April-December 2024, aided by supply-side measures. The RBI has projected inflation to decline to 4.6% in Q1 FY26 and 4.0% in Q2 FY26, though geopolitical uncertainties could pose risks to price stability.
The capital expenditure outlay for FY 2025-26 is set at ₹11.21 lakh crore (3.1% of GDP), with ₹1.5 lakh crore earmarked as interest-free loans to states. This is nearly 3.3 times the capital outlay in FY 2019-20, emphasizing the government’s push for infrastructure-led growth.
India’s merchandise exports grew by 1.6% year-on-year (YoY) in April-December 2024, while services exports expanded by 11.6% in the same period. The current account deficit (CAD) moderated to 1.2% of GDP in Q2 FY25, down from 1.3% in the same quarter last year.
Foreign Direct Investment (FDI) inflows witnessed a revival, increasing from $42.1 billion in April-October FY24 to $48.6 billion in the same period of FY25. India’s foreign exchange reserves stood at $640.3 billion as of December 2024, sufficient to cover about 90% of the country’s external debt.
The Central Government debt-to-GDP ratio is projected to decline from 57.1% in FY 2024-25 to 56.1% in FY 2025-26, with a long-term goal of reducing it to 50±1% by March 2031. The fiscal policy strategy aims to ensure sustained, inclusive growth while maintaining macroeconomic stability.
