Lok Sabha Question No. 101 (STARRED), answered on 2025-12-08
Subject: Economic Impact of Consumption led Growth
Ministry: FINANCE
Asked by: Shri Ravindra Shukla Alias Ravi Kishan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## STARRED QUESTION NO.†*101

TO BE ANSWERED ON MONDAY, DECEMBER 8, 2025 / Agrahayana 17, 1947 (Saka)

## Economic Impact of Consumption led Growth

†*101. Shri Ravindra Shukla Alias Ravi Kishan: Will the Minister of FINANCE be pleased to state:

be pleased to state:

(a) whether the Government is aware that the Gross Domestic Product (GDP) growth rate in the  second  quarter  of  the  current  Financial  Year  has  remained  7.2  per  cent  and  where  as consumption-led growth is projected to improve further for 2025-26, if so, the details thereof; (b) the details of the fiscal or policy initiatives proposed by the Government to stimulate the consumption growth;

- (c) whether any new policy is being formulated by the Government to balance the rural and urban consumption, if so, the details thereof; and
- (d) the details of the Government's assessment of the likely impact of consumption growth?

## ANSWER

THE FINANCE MINISTER

(SMT. NIRMALA SITHARAMAN)

(a) to (d): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (A)  TO  (D)  OF  THE LOK SABHA STARRED QUESTION NO. † *101 RAISED BY SHRI RAVINDRA SHUKLA ALIAS  RAVI  KISHAN  ON  08.12.2025  REGARDING  ECONOMIC  IMPACT  OF CONSUMPTION LED GROWTH

(a):  As  per  the  National  Statistics  Office  (NSO),  Ministry  of  Statistics  and  Programme Implementation (MoSPI), GDP at constant prices has been estimated to grow at 8.2 per cent in the second quarter (Q2) of 2025-26 as against 5.6 per cent in Q2 of 2024-25 and 7.8 per cent in the first quarter (Q1) of 2025-26, reflecting accelerating growth momentum in the economy. The share of Private Final Consumption Expenditure (PFCE) in GDP has improved from 62.2 per cent in Q2 of 2024-25 to 62.5 per cent in Q2 of 2025-26, while its growth in constant price terms improved from 6.4 per cent to 7.9 per cent during the corresponding period.

(b) The Government has undertaken a multi-pronged strategy to stimulate consumption growth in  the  economy  through a combination of  demand-supporting measures, income-enhancing supply-side strategies and structural reforms. Policies measures such as the new income tax exemption  for  annual  incomes  up  to  ₹12  lakh,  recent  GST  rate  rationalisation,  continued emphasis  on  ease  of  doing  business,  skilling,  employment  generation,  and  infrastructure development, along with expanded access to credit through schemes like MUDRA and PMSVANidhi, are expected to boost consumption growth in the economy.

(c) Through various policy initiatives, the Government has emphasised on achieving a balanced growth in rural and urban consumption. Urban livelihood and skilling programmes alongside tax reliefs and digital payments expansion in urban centres are boosting consumption in urban areas.  Alongside,  targeted  flagship  programmes  such  as  PM-KISAN,  Mahatma  Gandhi National Rural Employment Guarantee Scheme, PM Awas Yojana (Gramin), agri-productivity missions and Self Help Group-based livelihood initiatives are ensuring broad-based income gains across rural areas.

(d) The strengthening of consumption demand will have a positive impact on overall economic activity  by  supporting  household  incomes,  encouraging  private  investment  and  reinforcing economic growth.

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