The Reserve Bank of India predicted last month that India's GDP will grow by 7.3% in real terms this year, citing solid industrial growth, robust rural demand, good farm output, and recovering urban consumption.
According to official figures released on Wednesday, India's GDP is predicted to increase 7.4% in the current fiscal year due to robust development in manufacturing and services, healthy consumer consumption, and robust investments in fixed assets.
In nominal terms, India's GDP is predicted to rise by 8% in the current year, according to the statistics ministry's first advance estimates, which are released ahead of the Union budget for FY27 and will serve as the foundation for budget calculations.
The macro ratios of fiscal deficit, tax buoyancy, and the Center's debt in relation to nominal GDP are all projected by the government.
The real GDP is expected to grow by 7.4% in FY26 after expanding by 6.5% in FY25 and 9.2% in FY24.
Up till FY25, India's GDP grew by an average of 8.2% since the epidemic year economic recession in FY21.
According to the most recent data, agriculture output may increase by 3.1% this fiscal year from the 4.6% growth in the previous fiscal year, while manufacturing output is expected to grow by 7% in FY26, up from 4.5% a year ago.
This year, construction is expected to rise at a rate of 7%, down from 9.4% last year. According to the data, the services industry is expected to rise by 9.1% compared to 7.2% in FY25.
The largest engine of India's economy, household consumption, is predicted to grow by 7% this fiscal year compared to 7.2% last year.
It is anticipated that investment in fixed assets, such as buildings, factories, and machinery, will increase by 7.8% in FY26 compared to 7.1% in the previous year.
It is anticipated that government spending will increase by 5.2% as opposed to 2.3% the previous year.
The Reserve Bank of India predicted last month that India's GDP will grow by 7.3% in real terms this year, citing solid industrial growth, robust rural demand, good farm output, and recovering urban consumption. The RBI forecast growth of 6.5% in the March quarter and 7% in the December quarter.
Strong increase in the current year is anticipated as a result of the excellent September quarter performance. On November 28, chief economic advisor V Anantha Nageswaran upped his estimates, stating that the robust 8% growth in the first half of the year and the cumulative impact of structural reforms will likely help the Indian economy develop at 7% or more this fiscal year.
Citing strong domestic consumption and strong export performance, the Asian Development Bank (ADB) increased its FY26 growth prediction for India last month to 7.2% from 6.5% in September.
The Fitch group subsidiary India Ratings and Research stated on Tuesday that it projects the Indian economy would expand by 7.4% this fiscal year and 6.9% in FY27. The company stated, citing its chief economist and head of public finance Devendra Kumar Pant, that domestic reforms, such as the income tax cut in the FY26 budget, GST rationalization, and three foreign trade agreements with Oman, the UK, and New Zealand, will help the economy withstand global uncertainties caused primarily by the US tariffs.
According to Pant, the El Niño pattern from mid-2026, a weak currency as a result of bad capital flows, slow growth in global commerce, artificial intelligence, and the base effect from robust growth in FY26 are the challenges for the upcoming fiscal year.
The new base year
Prior to the launch of a new national accounts series on February 27, when the second advance estimate for the current fiscal year will be announced, the first advance estimate for FY26 would be the last GDP-related data release based on the 2011–12 base year.
Once the new series is released, experts do not anticipate a significant change in growth rates.
The basket of goods and services and their weights will be adjusted in the new GDP estimate that uses 2022–2023 as the base year. The growth projection might vary, but it would only be slight, according to D.K. Srivastava, principal policy advisor at EY India.
According to Srivastava, the economy will grow by 7.4–7.6% in the current fiscal year and 6.5–6.8% in the following.
Recently, there has been political discussion about the current GDP base-year.
The opposition Congress party criticized the International Monetary Fund's data adequacy evaluation of India's national accounts, which received a "C" rating, following the announcement of an 8.2% real GDP growth in the September quarter.
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