India’s private consumption growth took a slight dip in Q4 of FY25, according to a Bank of Baroda report. Real private spending grew at 5.9%, down from 6.2% in the same quarter last year. Government spending didn’t fare any better, shrinking by 1.8% compared to last year’s 6.6% rise. Ouch.
The report paints a mixed picture for consumption demand based on recent data. While non-oil, non-gold, and electronic imports are looking up, auto sales, steel consumption, and power demand are losing steam. Not exactly the momentum we hoped for.
Over in agriculture, the government has bumped up MSPs for kharif crops. All eyes are now on the monsoon, which could make or break rural demand this year.
Fiscal deficit targets? Met. The Centre hit its 4.8% GDP goal for FY25 and is aiming for 4.4% in FY26. But total spending fell short of revised estimates, coming in at Rs 36 lakh crore against Rs 37 lakh crore projected.
Tax collections are feeling the pinch too. April 2025 data shows direct tax growth slowed to 12.9% from last year’s 34.1%, while indirect taxes grew at a modest 4.3%. Blame it on those high base effects from last year.
What’s next? Urban demand seems steady with electronics and imports holding up, but rural growth hangs on monsoon rains and kharif output. The economy’s playing a waiting game.