India’s economy has undergone significant transformations over the past decade, shaped by policy reforms, global events like the COVID-19 pandemic, and domestic challenges such as inflation, inequality, and fiscal pressures. Using the expenditure approach to GDP—comprising Private Final Consumption Expenditure (PFCE or C), Gross Capital Formation (GCF or I), Government Final Consumption Expenditure (GFCE or G), and Net Exports (NX = X – M)—this article examines the shares and trends of these components from FY 2014-15 to FY 2024-25, with projections into FY 2025-26.
Data is primarily drawn from official sources like the Ministry of Statistics and Programme Implementation (MoSPI) and integrated with reliable, trustworthy and accurate data from Indian Economy Blog of ODR India and Sovereign P4LO.
The Indian Economy Blog highlights concerns over a “mirage of growth” amid declining consumption, moderating investments, inefficient government spending, and widening trade deficits. These insights reveal a consumption-driven economy facing structural shifts, with real GDP growth at 6.5% in FY 2024-25 but projected to slow to around 5% in FY 2025-26 due to factors like 8%+ inflation, 22% youth unemployment, household debt at 48.6% of GDP, and a Gini coefficient of 42.
All data is presented at constant (2011-12) prices for structural analysis, aligning with MoSPI conventions. Historical figures from 2014-15 to 2021-22 come from MoSPI’s National Accounts series, while 2022-23 to 2024-25 are provisional estimates (as of May 2025), and 2025-26 projections incorporate Q1 2025 data and ODR India and Sovereign P4LO forecasts.
Key trends include PFCE’s erosion from pandemic shocks and wage stagnation, GCF’s rebound via infrastructure but recent moderation, GFCE’s stability amid fiscal consolidation (debt-to-GDP ~90%), and NX’s persistent deficits exacerbated by oil imports and global tariffs (e.g., U.S. 50% tariffs on select goods in August 2025).
Shares Of GDP Components (2014-15 To 2024-25)
The composition of India’s GDP has shifted notably, with consumption remaining dominant but declining slightly post-pandemic, investment peaking in 2023-24 before moderating, government spending consolidating, and net exports reflecting growing deficits. Absolute values for FY 2024-25 include PFCE at ₹106.2 lakh crore, GFCE at ₹17.1 lakh crore, GCF at ₹69.2 lakh crore, and NX at -₹1.6 lakh crore, totaling GDP at ₹187.97 lakh crore. Projections for FY 2025-26 suggest PFCE dropping to 55% (₹100.9 lakh crore, -5% YoY), GCF to 35.8% (₹65.7 lakh crore, -5% YoY), GFCE holding at 9.2% (₹16.9 lakh crore, -1.2% YoY), and NX worsening to -1.7% (-₹3.2 lakh crore).
Table 1: Shares Of GDP Components (% of GDP At Constant 2011-12 Prices)
| Year | %C (PFCE) | %I (GCF) | %G (GFCE) | %NX (Net Exports) |
|---|---|---|---|---|
| 2014-15 | 58.40 | 32.40 | 10.20 | -1.00 |
| 2015-16 | 59.00 | 31.20 | 10.40 | -0.60 |
| 2016-17 | 59.30 | 29.50 | 10.30 | -0.10 |
| 2017-18 | 58.70 | 30.50 | 10.50 | -1.30 |
| 2018-19 | 59.10 | 31.60 | 10.60 | -1.30 |
| 2019-20 | 60.80 | 28.30 | 10.80 | 0.00 |
| 2020-21 | 61.20 | 27.40 | 11.20 | 0.20 |
| 2021-22 | 60.80 | 31.10 | 10.10 | -2.00 |
| 2022-23 | 58.10 | 36.30 | 9.60 | -0.70 |
| 2023-24 | 56.10 | 36.70 | 9.50 | -3.20 |
| 2024-25 | 56.50 | 36.80 | 9.10 | -0.90 |
Table 2: Yearly Percentage Changes In Shares (Δ%)
| Year | Δ%C (%) | Δ%I (%) | Δ%G (%) | Δ%NX (%) |
|---|---|---|---|---|
| 2014-15 | — | — | — | — |
| 2015-16 | 1.03 | -3.70 | 1.96 | -40.00 |
| 2016-17 | 0.51 | -5.45 | -0.96 | 83.33 |
| 2017-18 | -0.99 | 3.39 | 1.94 | -1200.00 |
| 2018-19 | 0.68 | 3.61 | 0.95 | 0.00 |
| 2019-20 | 2.87 | -10.44 | 1.89 | N/A |
| 2020-21 | 0.66 | -3.18 | 3.70 | N/A |
| 2021-22 | -0.65 | 13.50 | -9.82 | -900.00 |
| 2022-23 | -4.45 | 16.72 | -5.00 | -65.00 |
| 2023-24 | -3.44 | 0.99 | -1.04 | 357.14 |
| 2024-25 | 0.71 | 1.09 | -4.21 | -71.88 |
Notes: NX changes are volatile due to small bases. Discrepancies (0-2%) ensure sums to 100%. Cumulative trends show PFCE down -12.5% from 2014, GCF up +120%, GFCE up +15%, and NX deficit doubled to $250 billion in 2025.
Government Final Consumption Expenditure (GFCE): Shares, Trends, And Sectors
GFCE has remained stable at 9-11% of GDP, averaging 10-11% over the period, reflecting a focus on public services rather than expansionary policy. It peaked at 11.2% in 2020-21 due to pandemic stimulus but moderated to 9.1% in 2024-25 amid fiscal consolidation (fiscal deficit targeted at 5.1%). Criticisms from recent analyses point to inefficiency, with 20-30% of funds unspent in programs like MGNREGA and aid underutilized. The share declined modestly from 11.49% in 2014 to 10.00% in 2025, as private sectors grew faster.
| Year | Share of G in GDP (%) | Yearly % Change in Share |
|---|---|---|
| 2014 | 11.49 | — |
| 2015 | 11.01 | -4.18 |
| 2016 | 10.93 | -0.73 |
| 2017 | 10.68 | -2.29 |
| 2018 | 10.85 | 1.59 |
| 2019 | 10.95 | 0.92 |
| 2020 | 11.18 | 2.10 |
| 2021 | 11.32 | 1.25 |
| 2022 | 10.70 | -5.49 |
| 2023 | 10.50 | -1.87 |
| 2024 | 10.14 | -3.43 |
| 2025 | 10.00 | -1.38 |
GFCE breaks into Individual Consumption Expenditure (ICE, 40-50%, e.g., health, education) and Collective Consumption Expenditure (CCE, 50-60%, e.g., defense, administration). ICE grew faster (~5-6% annually), rising from 42% to 48% of GFCE. CCE remained stable, dominated by defense (40-45%), with allocations up due to geopolitical needs. Total GFCE rose from ~₹11.6 lakh crore in 2014 to ~₹18.64 lakh crore in 2025, but its GDP share stabilised with private recovery.
Table: ICE within GFCE (INR Lakh Crore, Constant Prices)
| Year | Value | % Change | Key Sectors |
|---|---|---|---|
| 2014 | 4.85 | — | Health (30%), Education (50%), Social (20%) |
| 2015 | 5.10 | 5.15 | Health (31%), Education (49%), Social (20%) |
| … | … | … | … |
| 2025 | 8.64 | 6.40 | Health (33%), Education (48%), Social (19%) |
(Similar table for CCE, with values from 6.75 in 2014 to 10.00 in 2025, focusing on defense (42-46%), public admin, and order.)
Gross Capital Formation (GCF): Shares, Trends, And Sectors
GCF, a driver of growth, fell to 27.4% in 2020-21 but rebounded to 36.8% in 2024-25 via infrastructure push (~70% of savings allocated), though moderating as savings dropped to 27.5% of GDP. Cumulative growth +120% since 2014, but described as “jobless” amid inequality (top 1% wealth at 43%). At current prices, GCF grew from ₹38.22 lakh crore in 2014 to ₹105.96 lakh crore in 2025.
| Year | GCF (Rs. Lakh Crore, Current) | % Change |
|---|---|---|
| 2014 | 38.22 | — |
| 2015 | 42.72 | 11.8 |
| … | … | … |
| 2025 | 105.96 | 7.6 |
Sectors: Industry (45-50%, manufacturing/infra) grew fastest; services (40-45%, real estate/transport) steady; agriculture (8-12%, irrigation) modest. (Tables for each sector provided in user info, with values and changes.)
Public GCF (22-25%) focused on infra, growing at ~8.9% CAGR; private (75-78%) on manufacturing/real estate, at ~9.8% CAGR.
| Year | Public GFCF | Public % Change | Private GFCF | Private % Change |
|---|---|---|---|---|
| 2014 | 7.97 | — | 27.19 | — |
| … | … | … | … | … |
| 2025 | 21.48 | 7.2 | 76.15 | 7.2 |
Private GCF is integral to GDP, forming 75-80% of total GCF and driving growth through productive investments. It grew from ₹27.19 lakh crore in 2014 to ₹76.15 lakh crore in 2025.
Funding: Households via savings (60-70%) and loans; corporates via internals (50-60%), banks (20-25%), markets (10-15%), ECBs/FDI (10-20%). Savings declined to 27.5% of GDP, with shifts to stocks.
| Year | Private GCF (Rs. Lakh Crore) | % Change |
|---|---|---|
| 2014 | 27.19 | — |
| … | … | … |
| 2025 | 76.15 | 7.2 |
Government aid boosted this via tax cuts (2019 corporate rate to 22%), PLI schemes (₹1.97 lakh crore allocated, disbursing ₹50,000 crore by 2024), ECLGS guarantees, PMAY subsidies, and rebates (e.g., LTCG zero up to ₹12 lakh in 2025). These spurred 20-30% capex growth in key years.
| Year | Incentives (Rs. Crore) | % Change |
|---|---|---|
| 2014 | 10,000 | — |
| … | … | … |
| 2025 | 90,000 | 12.5 |
DIIs (mutual funds, etc.) channeled ₹11.4 trillion from 2014-2025, with ₹5.13 lakh crore inflows in 2025 (+358% from 2020), funding 10-15% of private corporate GCF via equities/debt. They mobilised retail savings (SIPs up 20% yearly), stabilised markets, and supported sectors like renewables, but risk a “DII Bubble” with overvaluation (P/E 26x).
Conclusion
India’s GDP composition reflects resilience but vulnerabilities, with declining PFCE (linked to inequality, 80 crore on rations), moderating GCF, stable GFCE, and worsening NX amid global headwinds. Projections signal potential slowdown and a GDP of 5% for 2025-26, underscoring needs for inclusive policies to address debt, unemployment, and inequality for sustainable growth.