The Finance Ministry expects the economy to grow by 6.5% in real terms in FY25. In its November economic report, the ministry highlighted a bright growth outlook for October to December. Rural demand remains strong, and urban demand is steadily improving in the first two months of the quarter.
India’s GDP growth slowed to 5.4% during July-September, marking a seven-quarter low. The ministry attributed this slowdown to softer public capital expenditure and weaker private investments. Global uncertainties, excess capacity, and fears of dumping further impacted private capex.
The ministry noted early signs of recovery in capital formation in the second half of FY25. Union Government capital expenditure is gaining momentum. Infrastructure and capital goods order books grew sharply during FY24 and the first half of FY25. These trends signal a pent-up investment drive that is expected to unfold in the coming quarters.
The Finance Minister emphasized that public investments will play a critical role in driving economic growth. With improving demand and renewed investment activity, the ministry remains optimistic about sustained economic recovery. The report underlines that growth fundamentals are strengthening despite short-term challenges, setting the stage for improved performance in FY25.
