MUMBAI: India's economy demonstrated resilience with a robust 6.2% growth in the October-December quarter of the 2024-25 fiscal year, as per data released by the National Statistics Office (NSO) on February 28, 2025. This marks a significant rebound from the previous quarter's growth of 5.6%. The uptick in GDP is largely attributed to increased government expenditure and strong consumer demand, particularly in rural areas.

The rebound in GDP growth can be attributed to several factors, including increased government spending, a revival in private consumption, and a strong performance in the agriculture sector. The Kharif crop output showed robust growth, contributing to the overall economic expansion.

Higher government spending, which supported infrastructure and rural development, along with an increase in consumer spending, particularly in rural regions, also played a pivotal role, due to boosted rural incomes, leading to a surge in demand across various sectors.

The construction sector led with an impressive 8.6% growth, contributing significantly to overall economic performance. Other sectors also showed positive results, including financial, real estate, and professional services, which grew by 7.2%, and trade, hotels, transport, communication, and broadcasting services, which grew by 6.4%. These sectoral performances demonstrate a diversified growth trajectory across the economy.

Private final consumption expenditure registered a growth of 7.6% during this period, reflecting a revival in rural demand. The government's efforts to boost household consumption and investment through policy measures, such as income tax cuts and interest rate reductions, have also played a crucial role in supporting economic growth.

Despite the positive growth figures, experts caution that achieving the full-year GDP growth target of 6.5% will require a strong performance in the fourth quarter. The Reserve Bank of India (RBI) has projected a GDP growth rate of 6.6% for the fiscal year 2024-25.

To help boost household consumption, savings and investment, the Union government announced in its Budget on February 1 that there would be no income tax payable for income up to Rs 12 lakh under the new regime. The limit would be Rs 12.75 lakh for salaried taxpayers considering the standard deduction of Rs 75,000.