New Delhi, May 31: India’s economy recorded robust growth in the fourth quarter of FY25, largely driven by a significant increase in net indirect taxes, according to a report by the State Bank of India (SBI).
The report revealed that the country’s GDP grew by 7.4% in Q4 FY25, surpassing expectations. This stronger-than-anticipated performance was primarily supported by a 12.7% surge in net indirect tax collections, which played a key role in boosting economic activity.
“Q4 throws a pleasant surprise at 7.4%, buoyed by growth in net indirect taxes,” the report stated.
SBI maintains a positive outlook for FY26, forecasting India to remain the fastest-growing major economy, with GDP growth projected between 6.3% and 6.5%. The report attributes this confidence to strong macroeconomic fundamentals, a healthy financial sector, and continued focus on long-term development goals.
These strengths are expected to provide resilience against ongoing global uncertainties.
GST Collection Trends
Data from the government showed consistent growth in GST revenue:
January 2025: ₹1.96 lakh crore (up 12.3% YoY)
February 2025: ₹1.84 lakh crore (up 9.1% YoY)
March 2025: ₹1.96 lakh crore (up 9.9% YoY)
Sectoral Performance
Economic performance in Q4 FY25 was broad-based, with most sectors recording improved growth:
Overall services sector grew by 7.3% in Q4
Public administration, defence & other services: 8.7%
Financial, real estate & professional services: 7.8%
On a full-year basis, services expanded by 7.2% in FY25, compared to 9.0% in FY24
The report also cited the Reserve Bank of India’s latest data indicating a rise in household savings. According to SBI, this trend is likely to support domestic investment and finance economic expansion without triggering significant inflation. As a result, the bank does not anticipate major demand-driven price pressures in the near term.
Despite external and geopolitical uncertainties, SBI believes India is well-positioned to maintain a stable and high-growth trajectory through FY26.
(With agency inputs)
