India’s Economic Growth Slows to 6.2% in Q3, Manufacturing and Mining Underperform

New Delhi, February 28: India’s economic growth decelerated to 6.2% in the October-December quarter of FY 2024-25, reflecting sluggish performance in key sectors such as manufacturing, mining, and construction, according to the latest data released by the National Statistical Office (NSO) on Friday. However, the GDP growth showed an improvement over the 5.6% recorded in the second quarter of the current fiscal.

The GDP growth rate was significantly lower compared to 9.5% in Q3 of FY 2023-24, highlighting a broad-based slowdown in economic activities. The NSO also revised its second advance estimate for FY 2024-25 GDP growth to 6.5%, slightly higher than the 6.4% projected in January.

Sectoral Performance: Weak Manufacturing, Strong Agriculture​

• Manufacturing growth plunged to 3.5% in Q3 from 14% in the same period last year, indicating a sharp deceleration.
• Mining and quarrying expanded by a modest 1.4%, down from 4.7% in Q3 of FY 2023-24.
• Construction sector growth also eased to 7% from 10% recorded a year earlier.
• Agriculture stood out with robust growth, rising 5.6% in Q3, a significant improvement from 1.5% in Q3 of FY 2023-24.

Among services:

• Electricity, gas, and water supply expanded by 5.1%, compared to 10.1% a year earlier.
• Trade, hotels, transport, and communication services grew at 6.7%, slower than the 8% recorded previously.
• Financial, real estate, and professional services witnessed 7.2% growth, down from 8.4% in Q3 last year.
• Public administration, defense, and other services posted 8.8% growth, slightly improving from 8.4% a year ago.

GDP Estimates and Growth Outlook​

The Real GDP (Constant Prices) for FY 2024-25 is projected at ₹187.95 lakh crore, up from the First Revised Estimate of ₹176.51 lakh crore for FY 2023-24, translating to an expected 6.5% growth.

Nominal GDP (Current Prices) for FY 2024-25 is projected to reach ₹331.03 lakh crore, a 9.9% rise from ₹301.23 lakh crore in FY 2023-24.

For Q3 FY 2024-25,

• Real GDP is estimated at ₹47.17 lakh crore, marking 6.2% growth over ₹44.44 lakh crore in Q3 FY 2023-24.
• Nominal GDP stood at ₹84.74 lakh crore, reflecting 9.9% growth from ₹77.10 lakh crore a year ago.

The GDP growth for FY 2023-24 has been revised upward to 9.2%, up from the previous estimate of 8.2%, indicating stronger-than-expected expansion last fiscal.

Revised Estimates for Previous Quarters​

The GDP estimates for Q1 and Q2 of FY 2024-25 were also adjusted:

• Q1 GDP growth was revised to 6.5% (down from 6.7%)
• Q2 GDP growth was revised to 5.6% (up from 5.4%)

Economic Slowdown in First Nine Months​

During April-December 2024, the Indian economy expanded by 6.1%, significantly lower than the 9.5% growth in the corresponding period of the previous year.

Rising Per Capita Income​

The Per Capita Net National Income (current prices) is estimated at ₹1,88,892 for FY 2023-24, up from ₹1,69,145 in FY 2022-23.

Conclusion​

India’s economic momentum has softened, with key sectors like manufacturing, mining, and construction under pressure. However, agriculture and public services have provided some resilience. With GDP growth pegged at 6.5% for FY 2024-25, the focus will be on policy measures to boost industrial output and sustain economic expansion in the coming quarters.