More good news for India’s economy. Following the news of India becoming the fourth-largest economy, at more than $4 trillion, the numbers for the fourth quarter of FY25 are out. At 7.4 per cent, the growth numbers have exceeded the market expectations, leaving many pleasantly surprised.
We finished the third quarter at 6.4 per cent, the second quarter at 5.6 per cent, and the first quarter at 6.5 per cent. Interestingly, in FY24, the GDP grew at 9.5 per cent in Q3 and 8.4 per cent in Q4. So, what happened?
We must factor in the external factors at play here. In FY25, the first quarter, between April and June, was lost to the national elections. Business activity was largely muted, cash flows were restricted, and new orders were delayed. Nothing unusual, for elections of this magnitude and importance do leave the businesses on the precautionary backfoot.
The second quarter, between July and September, was about getting used to a new avatar of the Narendra Modi Government. People were sceptical, given an unusual alliance in the Centre. However, it was soon visible to everyone that things were not going to change. The Lok Sabha numbers had not dented PM Modi’s socio-economic pursuits, and the show was to go on, uninterrupted.
Whatever little doubts that remained were decimated on the morning of October 8, 2024. The flip in numbers, within twenty minutes, around 10:00 AM, sealed the political fate of the Congress. The Bharatiya Janata Party had triumphed expectations and predictions, and became the first party to register a third consecutive win (with complete five-year terms). The Haryana victory set up the third quarter for an economic resurgence.
By the beginning of the fourth quarter, the BJP was in the driver’s seat. Maharashtra had been won with a thumping majority, and the party was eyeing Delhi next. The Budget came with the good news of a tax cut, enabling zero income tax for citizens with Rs. 12.75 Lakh annual income (standard deduction included).
The larger message behind the fourth quarter numbers must be acknowledged. Political stability is directly proportional to growth numbers. While elections are an unavoidable occurrence in the trajectory of our democracy, the idea of ‘One Nation, One Election’, must be discussed with greater vigour. The continuity offered by the Narendra Modi government, in its third term, has also given the economy a critical thrust.
From here, it’s a journey of a few years until we become the third-largest economy on the planet, trailing China and the United States of America. The evolution of our economy will add to our geopolitical heft, inevitably. As the largest free market in the world, with over a billion people, consumerism and the growing middle class offers enough nudge for the MSMEs and other aspiring entrepreneurs to embrace manufacturing.
The tax cuts will also kick in next year, ushering in at least Rs. 1 Lakh Crore more into the economy. This will soon reflect in automobile sales numbers, tourism revenue, and other indirect taxes, as the spending goes up. The mere fact that the Modi Government was able to introduce these tax cuts is a testament to their stupendous fiscal management in the last eleven years.
The other message is that of self-reliance. While the pandemic, Russia-Ukraine war, and the global supply chains crisis have put the manufacturing ambition into a hyperdrive mode, we can do more. India Stack and UPI are a stunning example of how self-reliance can propel success in other sectors, like the service economy. Close to 1,868 Crore UPI transactions in May 2025 further showcase the resolve of the Indian market.
However, it’s now time to go big on hardware. The ongoing ‘Operation Sindoor’ proves how warfare is evolving, and why we should not rely on external players, especially China, for critical components. This is where our focus must be. The services industry has sustained the aspiring Indian middle class for almost three decades. It’s now time for manufacturing to take over.
As we grow to become a ten trillion dollar economy by 2035, the nature of employment will evolve as well. Artificial Intelligence applications, offered at throwaway prices, are making several jobs redundant. The cycle of time moves, as it did when computers replaced typewriters, but no reason for India to be disheartened. Our economy evolved well with computers, it’ll do so with AI and hardware as well.
The 7.4 per cent growth number has a message for India: keep the hustle going. Do not be afraid to evolve with the times, and while the ten trillion mark is a decade away, start preparing for it today. On the policy front, we must begin pondering ideas that allow us to minimise disruption (One Nation, One Election). On the innovation front, let’s get people to start aspiring for jobs that involve not sitting before a computer, but manufacturing one.
This is India’s decade. The rise is inevitable and indispensable for the world.
(Tushar Gupta is a Delhi-based journalist and a political commentator)