Key Highlights

• Chief Economic Advisor V. Anantha Nageswaran expects India’s GDP growth to exceed 6.8% in FY26.

• Consumer demand to rise due to GST rate cuts and personal income tax relief.

• Domestic consumption, capex momentum, and services sector to drive growth.

• Inflation remains stable, aiding financial and policy stability.

• India continues to outperform global peers amid global headwinds.

India’s Growth Story Gains Momentum

India is stepping into FY26 with renewed economic confidence. Chief Economic Advisor (CEA) V. Anantha Nageswaran has projected that India’s GDP growth will likely exceed 6.8%, supported by strong domestic drivers and policy stability.

Lower GST rates and income tax relief have boosted household disposable income, encouraging higher spending and sustaining consumption-led growth. Despite challenges such as global trade slowdown and geopolitical uncertainty, India’s economy remains one of the most resilient among major global players.

What’s Fueling the Optimism

1. Revival in Domestic Consumption

The government’s rationalization of GST rates and personal income tax has improved purchasing power. This is expected to translate into higher consumer spending, especially across essential and discretionary categories.

2. Capex-Led Expansion

Public capital expenditure remains a key growth pillar. Ongoing infrastructure projects, combined with a gradual pick-up in private investments, are strengthening manufacturing, logistics, and urban development.

3. Stable Financial Environment

India’s inflation trajectory remains under control, allowing for better credit flow across sectors. Healthy balance sheets in the banking sector further support lending and business expansion.

Sectoral Tailwinds Strengthening Growth

• Services and Digital Economy: India’s tech-driven services sector continues to expand, fueled by digital adoption and global outsourcing opportunities.

• Manufacturing and Exports: Production activity is improving as companies diversify supply chains towards India.

• Infrastructure and Utilities: Increased government spending on construction, transport, and energy is sustaining industrial momentum.

Broader Economic Picture

Even as advanced economies like the EU and China face slowdowns, India’s domestic growth remains largely insulated. Strong tax compliance, rising foreign direct investment in manufacturing, and a thriving startup ecosystem highlight India’s structural economic resilience.

These trends underline a broader transformation from a consumption-led to a more investment-driven growth model.

Outlook : A Year of Steady Expansion

India is well-positioned to maintain its status as the world’s fastest-growing major economy in FY26. Strong domestic demand, tax relief measures, and sustained infrastructure investments are expected to keep growth steady.

While external challenges such as commodity price volatility and global tensions persist, India’s robust fundamentals - fiscal prudence, policy stability, and reform momentum - provide a strong foundation for continued economic progress.

In summary

FY26 could mark another year of steady, broad-based growth for India, powered by consumption revival, investment momentum, and a resilient services sector.

Sources

• Ministry of Finance – Official Press Releases

• Press Information Bureau (PIB) – CEA statements & economic outlook

• Economic Survey & CEA Publications

• Office of the Chief Economic Adviser (CEA) – Public statements & reports

• Reserve Bank of India (RBI) – Macro & growth commentary

• Government of India – Economic Data Dashboard