Maha Kumbh to drive Q4 growth to 7.6%; sustaining this rate key to Viksit Bharat vision
Blitz SPECIAL : India’s economy is poised for a significant boost in the fourth quarter of FY25, with GDP growth expected to touch 7.6 per cent, thanks to a massive surge in consumer spending during the Maha Kumbh Mela. Chief Economic Advisor V. Anantha Nageswaran stated in New Delhi that the religious gathering, which saw an estimated 500-600 million pilgrims, will provide a major economic push, reinforcing the country’s growth momentum.
The Uttar Pradesh Government’s ₹7,500 crore investment in infrastructure for the event has already fuelled economic activity across multiple sectors. Additionally, strong wheat production, robust rabi sowing, rising vegetable prices, and improved connectivity are expected to contribute further to the expansion. Government initiatives such as support for MSMEs, tax relief measures, increased agricultural investments, and rising exports will also play a role in sustaining this momentum.
India’s nominal GDP growth for Q3 FY25 stood at 5.6 per cent, up from 5 per cent in Q2, while real GDP growth for Q3 was revised upward to 6.6 per cent. The second advance estimate for FY25 was also raised from 6.5 per cent to 6.6 per cent, reflecting positive economic trends driven by strong capital expenditure.
Long road to Viksit Bharat
While India’s near-term growth outlook remains strong, a World Bank report highlights a much bigger challenge — achieving high-income status by 2047. According to the report, India must maintain an annual GDP growth rate of 7.8 per cent over the next 22 years to reach this milestone.
The country has demonstrated impressive economic performance in the past, averaging 6.8 per cent growth between 2000 and 2023. However, under current policies, India’s economy is projected to grow at just 6.5 per cent annually, which falls short of the required pace. Without major structural reforms and increased investment, the 2047 target could remain out of reach.
The report underscores the need for stronger capital markets, manufacturing growth, better infrastructure, and productivity enhancements to sustain high growth. It also draws lessons from countries like South Korea and Chile, which successfully transitioned to high-income status through aggressive trade expansion, financial market development, and industrial growth.
For India to bridge the gap, its investment-to-GDP ratio must rise from 30 per cent to over 40 per cent by 2035. This will require a massive push in infrastructure, FDI inflows, and business-friendly policies. The ease of doing business, global trade expansion, and deeper financial markets will be crucial in shaping India’s economic transformation.
GDP calculations
Even as India celebrates its robust growth numbers, a heated debate is emerging over how GDP is calculated. Recent revisions to GDP estimates for FY23 and FY24 have raised concerns among economists, with the revised figures painting a much rosier picture than initially reported.
Growth for FY23 was revised up from 7.2 per cent to 8.0 per cent, with quarterly numbers also seeing sharp upward adjustments. The Q4 FY23 growth rate, initially estimated at 5.6 per cent, was revised to 6.2 per cent, while Q1 and Q2 FY23 were adjusted from 6.2 per cent and 6.3 per cent to 8.2 per cent and 7.3 per cent, respectively.
Many experts argue that these revisions may be inflating actual economic performance, especially given the weaker trends observed in private consumption and rural demand. A key issue is the heavy reliance on the Ministry of Corporate Affairs (MCA) database, which includes unlisted companies and startups that may report financials differently from listed firms.
One leading economist pointed out that while listed companies have performed well, their success does not necessarily reflect broader economic conditions. The concern is that the methodology could be overestimating economic activity, masking underlying challenges such as income inequality, weak consumer demand, and rural economic distress.
With significant data revisions becoming a recurring trend, many economists are now calling for a reassessment of India’s GDP computation methods to ensure greater accuracy and transparency.
The big picture
India’s Q4 growth outlook remains strong, with the Maha Kumbh Mela acting as a major economic catalyst. However, the long-term challenge of sustaining 7.8 per cent annual growth to reach high-income status by 2047 remains a steep climb. The country needs bold reforms, deeper investments, and structural shifts to achieve this ambitious goal. At the same time, concerns over GDP calculation methodologies highlight the need for better economic data transparency. As India positions itself as a future economic powerhouse, ensuring credible growth data and implementing strategic policy measures will be critical in shaping its economic destiny.