Key sectors such as manufacturing, services, and infrastructure are pushing ahead, supported by steady investment and policy focus, the govt note said.
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SAHIBA CHAWDHARY
The size of the Indian economy has nearly trebled in the last ten years starting fiscal year 2014-15 (FY15), a government note stated on Sunday. It stressed that the ease in inflation is not a temporary phenomenon.
“India’s economic size has expanded sharply. In 2014–15, the GDP at current prices was ₹106.57 lakh crore. This figure is expected to rise to ₹331.03 lakh crore in 2024–25, nearly tripling in ten years,” the note said.
The real economic growth rate was 6.5 per cent during FY 25. This is expected to be maintained at the same level this year as well. The government has projected growth to be in the range of 6.3-6.8 per cent for FY26.
Noting that the global conditions remain fragile, the note quoted the United Nations which has described the world economy as being in a “precarious moment” with trade tensions, policy uncertainties, and declining cross-border investments. “India continues to stand out as a bright spot, with global institutions and industry bodies expressing confidence in its growth prospects,” the note said. It said that rural consumption has picked up, city spending is rising, and private investment is on the upswing.
On the issue of inflation, it highlighted the current trend in the rates (retail inflation based on Consumer Price Index and wholesale inflation, based on Wholesale Price Index) offering relief to both households and businesses. While retail inflation cooled to a 75-month low of 2.82 per cent in May, wholesale inflation dipped to 14 months low of 0.39 per cent in the same month.
Food prices, which often have a big impact on overall inflation, have also cooled. The Consumer Food Price Index (CFPI) recorded an inflation rate of just 0.99 per cent in May 2025. This is the lowest food inflation seen since October 2021. Rural and urban food inflation were almost identical, at 0.95 per cent and 0.96 per cent, respectively. Compared to April 2025, food inflation declined by 79 basis points, showing a clear downward trend in essential items like vegetables and grains.
According to the Reserve Bank of India’s Financial Stability Report released in June, the outlook for inflation remains favourable. Food prices are expected to stay stable due to robust crop production. On the global front, the risk of imported inflation appears low for now. A slowdown in global demand is likely to keep prices of crude oil and other commodities in check. However, recent tensions in the Middle East have added some uncertainty to this picture.
Overall, the Reserve Bank believes that inflation will stay aligned with its medium-term target of 4 per cent. In fact, it may fall even slightly below that level in the coming months. “This easing trend gives confidence that the current price stability is not temporary, but part of a broader pattern of economic stability,” the note said.
It said key sectors such as manufacturing, services, and infrastructure are pushing ahead, supported by steady investment and policy focus. External risks remain, but India’s fundamentals are sound. “As the global economy continues to face challenges, India’s consistent performance offers reassurance that it is well placed to lead from the front and keep building a stronger, more inclusive future,” the note concluded.
Published on July 6, 2025
