India’s real GDP growth rate has been projected at 7.4 per cent for FY 2025–26, up from 6.5 per cent in FY 2024–25, according to the advanced estimates released by the Ministry of Statistics and Programme Implementation on Wednesday.
The estimates show that strong momentum in the services sector will be the main driver of growth. Financial services, real estate, professional services and public administration are projected to grow by 9.9 per cent at constant prices in FY 2025–26.
Trade, hotels, transport, communication and services related to broadcasting are estimated to expand by 7.5 per cent, the official statement said.
Growth in the secondary sector is also expected to remain steady, with manufacturing and construction projected to grow at 7 per cent. The agriculture sector is estimated to record a growth rate of 3.1 per cent.
Real Private Final Consumption Expenditure (PFCE) is projected to grow by 7 per cent during FY 2025–26, supported by income tax exemptions announced in the Union Budget and subsequent GST rate cuts across goods and services.
Gross Fixed Capital Formation (GFCF), a key indicator of investment activity, is estimated to grow by 7.8 per cent at constant prices during FY 2025–26, compared to 7.1 per cent in the previous financial year.
Meanwhile, India’s GDP growth accelerated to 8.2 per cent in the second quarter (July–September) of the current financial year, up from 5.6 per cent in the corresponding quarter of FY 2024–25, according to data released in November.
The secondary and tertiary sectors, which grew by 8.1 per cent and 9.2 per cent respectively, pushed real GDP growth in Q2 of FY 2025–26 above the 8 per cent mark. Manufacturing recorded a strong growth of 9.1 per cent, while construction grew by 7.2 per cent during the quarter.
In the services sector, financial, real estate and professional services registered a double-digit growth of 10.2 per cent in Q2. Agriculture and allied activities grew by 3.5 per cent, while electricity, gas, water supply and other utility services expanded by 4.4 per cent.
Real PFCE rose sharply by 7.9 per cent in Q2 of FY 2025–26, compared to 6.4 per cent in the same period last year, reflecting higher incomes and employment generation.
The stronger second-quarter performance followed a robust 7.8 per cent growth in the first quarter (April–June), taking real GDP growth for the first half (H1) of FY 2025–26 to 8 per cent, compared with 6.1 per cent in H1 of FY 2024–25.
Despite global headwinds, including tariff hikes by the United States, India continues to remain the world’s fastest-growing major economy.
The International Monetary Fund (IMF) has forecast India to be the only major economy expected to record growth above 6 per cent in FY 2025–26, even as global trade faces disruption and overall world growth slows.
-IANS
