According to an economic report, the fourth-quarter FY25 GDP in India rose by 7.4%, mainly because there were strong collections in indirect taxes. A big boost in net indirect taxes in the January–March period was vital in pushing the national economy forward.
The report said, “7.4 per cent growth in Q4 was mainly thanks to growth in net indirect taxes at a time when global uncertainty was high.” Analysts believe the same positive trend will continue this fiscal year.
According to the report, India is projected to maintain its top rank as the fastest-growing significant economy, with 6.3% to 6.5% GDP growth seen for FY26.
The trust in the economy comes partly from good GST revenue, which signals ongoing domestic spending and business movement. The total GST collections in January 2025 were ₹1.96 lakh crore, which was 12.3% more than a year earlier. February collections were ₹1.84 lakh crore (up 9.1%), and March collections further rose to ₹1.96 lakh crore (up 9.9%).
In each sector, the services sector was a major force, expanding 7.3% in the last quarter of FY25. The ‘Public Administration, Defence and Other Services’ area increased by 8.7%, and ‘Financial, Real Estate & Professional Services’ rose by 7.8%. The services sector grew by 7.2% in the full financial year, dropping from 9.0% in the earlier period, but remaining strong as compared to other regions.
India’s economy looks positive because its tax revenue is strong, the service sector continues to grow, and economists predict a good performance in FY26.
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