Indian economy estimated to expand at 7.4% in FY26, buoyant growth seen in services sector

Indian economy is estimated to have continued its growth momentum this fiscal with the FY26 rate of expansion seen at 7.4%, according to latest data from Ministry of Statistics & Programme Implementation. This marks a sharp rebound compared with 6.5% in the previous fiscal year, First Advance Estimates of Gross Domestic Product (GDP) data released by the government noted. Nominal GDP is estimated to grow at 8.0% in FY 2025-26. Buoyant Growth in Services Sector has been found to be a major driver in the estimated Real GVA growth rate of 7.3% in FY 2025-26.

Financial, Real Estate & Professional Services and Public Administration, Defence & Other Services in the Tertiary Sector have also been estimated to attain a substantial growth rate of 9.9% at Constant Prices in FY 2025-26. Trade, Hotels, Transport, Communication & Services related to Broadcasting Sector has been estimated to grow by 7.5% at Constant Prices in FY 2025-26.

Manufacturing and Construction in the Secondary Sector has been estimated to achieve a growth rate of 7.0% at Constant Prices in FY 2025-26. Agriculture & Allied Sector (3.1%) and Electricity, Gas, Water Supply & Other Utility Services Sector (2.1%) have seen moderate growth rate in GVA at Constant Prices during FY 2025-26.

Government stated that Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7.0% during FY 2025-26. Gross Fixed Capital Formation (GFCF) has been estimated to have 7.8% growth rate at Constant Prices during FY 2025-26, compared to 7.1% growth rate in previous FY.

There has been impressive recovery in manufacturing which rose from from 4.5 percent in the previous year and as tertiary sector which had expanded 7.2 percent in FY25.

Real GDP or GDP at Constant Prices is estimated to attain a level of Rs 201.90 lakh crore in FY 2025-26, against the Provisional Estimates (PE) of GDP for the FY 2024-25 of Rs 187.97 lakh crore. Nominal GDP or GDP at Current Prices is estimated to attain a level of Rs 357.14 lakh crore in the FY 2025-26, against Rs 330.68 lakh crore in FY 2024-25.

India's per capita GDP growth is estimated to have hit 6.5% in FY26, up from 5.5% in previous fiscal to stand at Rs 142119.

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