India’s economy will grow at the rate of 6.2% in the financial year 2025-26. The International Monetary Fund (IMF) has reduced the estimate of India’s Gross Domestic Product (GDP) growth. Earlier, the IMF had estimated the growth rate in FY26 at 6.5%. Earlier on April 16, Moody’s Ratings had reduced the growth rate estimate of the Indian economy for the calendar year 2025. Moody’s has projected the economy to grow at a rate of between 5.5%-6.5% in 2025, which was earlier 6.6%. The firm had reduced this estimate due to Trump’s new tariff policy. Moody’s firm said that there is a risk of reduced exports due to tariffs on diamonds, clothes and medical equipment. This could increase the trade deficit with the US. The firm said that a 90-day ban on tariffs may provide some relief, but export demand will decrease and business confidence will go down when the tariff is fully implemented. RBI said – Economy will grow at the rate of 6.5% in the financial year 2025-26 Reserve Bank of India i.e. RBI also reduced the economy growth for FY26 from 6.7% to 6.5% in the monetary policy meeting on 9 April. GDP growth was 6.2% in the third quarter GDP growth was 6.2% in the October-December quarter of FY 2024-2025. It was 8.4% in the same quarter a year ago (Q3 FY24). The National Statistical Office (NSO) released this data on 28 February. The economy is estimated to grow at the rate of 6.5% in the financial year 2024-2025. Earlier in the estimate released in January, the growth rate for 2024-25 was estimated at 6.4%, which is the lowest level in 4 years. In the last financial year 2023-24, the GDP growth rate was 8.2%. Status of GDP of last 5 years What is GDP? GDP is used to track the health of the economy. It shows the value of all goods and services produced within the country in a given time. It also includes foreign companies which produce within the country’s borders. There are two types of GDP GDP is of two types. Real GDP and nominal GDP. In real GDP, the value of goods and services is calculated on the base year’s value or stable price. Currently, the base year for calculating GDP is 2011-12. Whereas nominal GDP is calculated on current price. How is GDP calculated? A formula is used to calculate GDP. GDP=C+G+I+NX, here C means private consumption, G means government spending, I means investment and NX means net export. Who is responsible for the increase or decrease in GDP? There are four important engines for increasing or decreasing GDP. First is you and me. Whatever you spend contributes to our economy. Second is business growth of the private sector. It contributes 32% to GDP. Third is government expenditure. It means how much the government is spending on producing goods and services. It contributes 11% to GDP. And fourth is net demand. For this, total exports of India are subtracted from total imports, because in India imports are more than exports, hence its impact on GDP is negative.
