Govt raises FY26 GDP estimates to 7.4% on buoyant services sector; nominal GDP growth seen at 8%
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The government on Wednesday revised its estimate for real GDP growth in FY25–26 upward to 7.4%, against earlier estimates of 6.8%, as per the first advance estimates of the economy for FY26 released during the day.
The Economic Survey last year had pegged GDP growth for the current fiscal in the range of 6.3%-6.8%.
"Nominal GDP is estimated to grow at 8.0% in FY25-26. Buoyant growth in the services sector has been found to be a major driver in the estimated real GVA growth rate of 7.3% in FY25-26," the estimates suggested, while adding that the financial, real estate & professional services and public administration, along with defence and other services in the tertiary sector have been estimated to attain a substantial growth rate of 9.9% at constant prices in FY25-26.
"Trade, hotels, transport, communication & services related to broadcasting sector has been estimated to grow by 7.5% at Constant Prices in FY25-26,” as per the estimates. "Manufacturing and Construction in the Secondary Sector has been estimated to achieve a growth rate of 7.0% at Constant Prices in FY25-26," the estimates suggested.
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Agriculture and allied sector likely to see 3.1% growth
It is estimated that agriculture and allied sector likely to see a 3.1% growth while electricity, gas, water supply, and other utility services sector may see a moderate growth of 2.1% in GVA at Constant Prices during FY25-26.
"Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7.0% during FY 2025-26," it added.
GFCF may see a 7.8% growth rate at constant prices during FY25-26
On the infrastructure front, the estimates suggested that Gross Fixed Capital Formation (GFCF) will see a 7.8% growth rate at constant prices during FY25-26, compared to 7.1% growth rate in previous financial year.
The Indian economy has remained buoyant since the last quarter of the FY25 and recently consumption led growth has been witnessed on account of income tax and GST cuts. The GDP growth in the second quarter of FY25-26 was 8.20%.
Meanwhile, the first GDP growth data based on revised series with 2022 – 23 as the base year will be released on February 27 this year, while the first inflation data with revised base year will be released on February 12, as per the ministry of statistics and programme implementation. The first IIP data with the revised base year of 2022-23 will be released on May 26 this year. The revised base for calculation of inflation will be 2024, and IIP will be 2022-23.