New Delhi: India’s economy continued to show resilience and steady growth. According to the Ministry of Finance’s Monthly Economic Review for May 2025, despite global challenges including geopolitical tensions and trade uncertainties, the country recorded a 6.5 per cent real GDP growth in FY25.
This is in line with the Second Advance Estimates. The report attributes this performance to strong growth in the services and industrial sectors, along with a rebound in agriculture due to favourable monsoon conditions and record food grain output.
Positive Outlook
The outlook for the economy for the current financial year remains positive, backed by strong domestic demand, moderating inflation, a stable employment situation and a resilient external sector. However, the report cautions that global headwinds such as trade frictions, policy uncertainty and ongoing geopolitical conflicts may pose risks to the growth trajectory and should be monitored closely.
Job Growth
On the employment front, the indicators point to stability and formalisation of the workforce. Employees Provident Fund Organisation (EPFO) added 19.1 lakh net members in April 2025. Notably, 57.7 per cent of new subscribers were in the 18-25 age group, suggesting a rise in first-time job seekers joining the organised sector.
Besides this, the white-collar hiring has also picked up pace, with sectors like Artificial Intelligence, Machine Learning, Insurance, Real Estate, BPO/ITES and Hospitality leading the growth. Employment sub-indices from the Purchasing Managers’ Index (PMI) also reflect this trend.
In addition, the e-Shram portal, launched in 2021 to register unorganised workers, has now crossed 30.9 crore registrations as of 24 June 2025. The portal is intended to help workers access social security schemes and benefits through a Universal Account Number (UAN).
First 2 Months Data of FY26
According to the report, the High-frequency data from the first two months of FY26 indicates sustained momentum in the domestic economy. E-way bill generation reached 122.7 million in May, the second highest ever recorded, and continued to grow in double digits year-on-year. Petrol and diesel consumption also hit record highs, driven by seasonal travel and increased industrial activity and agricultural needs.
The manufacturing sector reported continued improvement in business conditions. While the growth rate of output and new orders moderated slightly, they remained above long-term averages. Export orders saw one of the strongest increases in three years. Construction activity saw slower growth compared to the last quarter of FY25, with steel consumption rising 7.0% during April–May and cement production increasing 6.7% in April, stressed the report.
The services sector remained robust with the Services PMI at 58.8 in May, slightly higher than April’s 58.7. Growth in service exports remained strong, supported by international demand. Air cargo volumes recorded the highest growth in five months, and the port traffic increased by 4.4% year-on-year, driven by containerised cargo, petroleum products and other goods.