India's GDP growth slows to 5.4% in Q2, hits near two-year low
India's economic growth slowed to 5.4 percent in the second quarter (July-September) of FY25, marking its slowest pace in nearly two years, according to the official data released on Friday. The slowdown was attributed to a weak performance in manufacturing and mining, alongside subdued consumption.
The GDP growth in Q2 was significantly lower than the 8.1 percent registered in the same quarter last year and the 6.7 percent growth in Q1 of FY25. The previous low of 4.3 percent was recorded in Q3 of FY23. The agriculture and Allied sector has bounced back by registering a growth rate of 3.5% in Q2 of FY 2024-25 after sub-optimal growth rates ranging from 0.4% to 2.0%, observed during the previous four quarters.
Chief Economic Advisor V. Anantha Nageswaran called the Q2 growth “disappointing” but highlighted bright spots in agriculture and construction. "The overall growth target of 6.5% for FY25 remains achievable," he assured. Nageswaran noted improvements in labour markets and low global crude oil prices as positive signs. However, he warned of challenges from global geopolitical instability, inflation, and uncertainties in advanced economies.
The government also reported a fiscal deficit of ₹7.5 lakh crore for April-October, 46.5% of the full-year target, while infrastructure output grew by 3.1% in October, significantly lower than the 12.7% growth in the same month last year.
Economic analysts expressed concerns over the unexpectedly sharp slowdown. While challenges persist, record kharif production estimates and promising rabi crop prospects are expected to support rural demand and income in the coming quarters.
Congress Slams Government for Sluggish Growth
The Congress on Friday criticized the government over India's economic growth slowing to a near two-year low of 5.4% in the July-September quarter, stating that the figures expose the gap between the reality and the "hype" created by Prime Minister Narendra Modi and his supporters.
Congress general secretary in-charge communications Jairam Ramesh said Prime Minister Modi's economic growth record remains far worse than it was under Manmohan Singh's prime ministership even after desperate "recalculations" of earlier economic growth.
