India's Economic Growth: Real GDP Expected to Surge by 7.4% in FY 2025-26

India's National Statistics Office forecasts a 7.4% rise in real GDP for FY 2025-26, up from 6.5% the previous year. Key drivers include robust investments, public spending, and low inflation. Economic stability is maintained despite global uncertainty, although challenges in private investment sentiment and agriculture remain.

According to the National Statistics Office's latest estimates, India's real GDP is projected to expand by 7.4% in the fiscal year 2025-26, compared to 6.5% in FY 2024-25, reaching a significant Rs 201.90 lakh crore. Nominal GDP is anticipated to grow at 8%, marking an economic upturn amidst ongoing global volatility.

Dharmakirti Joshi, Chief Economist of Crisil, emphasized the narrowing 60 basis point gap between nominal and real GDP, the smallest since 2011-12. He attributed India's resilient growth momentum to favorable policy environments, strong corporate balance sheets, and positive developments like above-normal monsoon and low oil prices.

Despite some hurdles, public capital investment remains a key growth driver, along with the thriving services sector. Private consumption, although slightly slower, continues to support economic health. Economists caution that while inflation is low, uncertainties in agriculture and cautious private investment sentiment pose risks, requiring sustained policy support.

(With inputs from agencies.)