Economy: India’s GDP growth surpasses projections, expected to grow at 7.4% in FY26
Virendra Pandit
New Delhi: Exceeding the government’s earlier projection of 6.3–6.8 percent, the Indian economy is expected to grow at 7.4 percent in the current financial year (2025-26), ending March 2026, according to the first advance estimates released by the National Statistics Office (NSO) on Wednesday,
The fresh estimates, released by the Union Ministry of Statistics and Programme Implementation, place real GDP growth higher at 7.4 percent than the 6.5 percent recorded in FY25, while nominal GDP growth is pegged at 8.0 percent for the current financial year, the media reported.
The services sector remained the key driver of expansion in FY26, with the estimated Real Gross Value Added (GVA) growth rate of 7.3 percent in FY26.
In the tertiary sector, financial, real estate and professional services, along with public administration, defence and other services, are estimated to grow by 9.9 percent at constant prices. Trade, hotels, transport, communication and services related to broadcasting are projected to expand 7.5 percent.
The secondary sector is also expected to maintain momentum, with manufacturing and construction together estimated to grow 7.0 percent in FY26 at constant prices.
In contrast, growth in the agriculture and allied sector is projected at a moderate 3.1 percent, while electricity, gas, water supply and other utility services may witness relatively slower movement in primary and utility-linked activities.
On the demand side, household spending and capital formation are expected to support overall demand. Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7 percent during FY26.
Investment activity is also projected to improve. The Gross Fixed Capital Formation (GFCF) has been estimated to have 7.8 percent growth rate at constant prices during FY26, compared with 7.1 percent growth in the previous year.
At constant prices, Real GDP is estimated at Rs. 201.9 trillion in FY26, up from Rs. 187.97 trillion in FY25. Nominal GDP is placed at Rs. 357.14 trillion, compared to Rs. 330.68 trillion a year earlier.
Real GVA is estimated at Rs. 184.5 trillion, while nominal GVA is projected at Rs. 323.48 trillion, reflecting growth of 7.3 percent and 7.7 percent, respectively.
