Data Alert
First advance estimate pegs FY26 GDP growth at 7.4% vs 6.5% FY25
This story was originally published at 16:55 IST on 7 January 2026
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--Govt: India FY26 GDP growth seen at 7.4% as per first advance estimate
--Informist poll estimated India FY26 GDP growth at 7.5%
--Govt: India FY26 nominal GDP growth seen 8.0% vs 9.8% FY25
--Govt: India FY26 GDP growth seen 7.4% vs 6.5% FY25
--Govt: India FY26 GVA growth seen 7.3% vs 6.4% FY25
--Govt: India FY26 nominal GDP growth seen 8.0% vs 10.1% assumed in Budget
--Govt: India FY26 agriculture sector growth seen 3.1% vs 4.6% FY25
--Govt: India FY26 mining sector growth seen (-)0.7% vs 2.7% FY25
--Govt: India FY26 manufacturing sector growth seen 7.0% vs 4.5% FY25
--Govt: India FY26 construction sector growth seen 7.0% vs 9.4% FY25
--Govt: India FY26 private consumption growth seen 7.0% vs 7.2% FY25
--Govt: FY26 gross fixed capital formation growth seen 7.8% vs 7.1% FY25
--Govt: FY26 govt consumption expenditure growth seen 5.2% vs 2.3% FY25
--Govt: India FY26 services sector growth seen 9.1% vs 7.2% FY25
--Govt: India FY26 industry growth seen 6.2% vs 5.9% FY25
NEW DELHI – India's GDP growth is estimated to rise to 7.4% in the current financial year ending March, according to the first advance estimate released by the statistics ministry Wednesday. The Indian economy had grown 6.5% in FY25.
The first advance estimate of FY26 GDP growth of 7.4% is in line with expectations. According to an Informist poll of economists, GDP growth was seen at 7.5% in FY26. The first advance estimate is higher than the Reserve Bank of India's projection of 7.3% GDP growth for FY26. The government in the Economic Survey for FY25 had pegged FY26 growth at 6.3-6.8%.
The gross value-added growth, which economists consider a more reliable indicator of economic activity than GDP, is seen rising 7.3% in FY26 from 6.4% in FY25.
The first advance estimate is a key number for the government as it forms the basis for its Budget numbers. The finance ministry will use the first advance estimate of FY26 GDP in current prices to assume a certain nominal GDP growth for FY27, which will then form the basis for the various Budget numbers for next year, including the fiscal deficit target and growth in tax collections.
According to the first advance estimate, nominal GDP growth is seen at a five-year low of 8.0% in FY26 against 9.8% last year. The finance ministry had assumed a nominal GDP growth of 10.1% in the Union Budget for FY26. Even with nominal GDP growth of 8.0%, the government will be able meet its budgeted fiscal deficit target of 4.4% of GDP for this year, assuming the government meets the absolute fiscal deficit target set in the Budget.
"Notably, the FAE (first advance estimate) for the nominal GDP for FY2026 is pegged at Rs. 357.1 trillion, similar to what was assumed in the Union Budget for this year. This rules out a beat or a miss in the fiscal deficit to GDP ratio on account of the denominator," said Rahul Agrawal, senior economist at rating agency ICRA. The agency does not expect a fiscal slippage over the targeted 4.4% of GDP, as "higher-than-budgeted non-tax revenues and likely expenditure savings would provide a buffer against the expected miss on taxes."
The first advance estimate of GDP growth for FY26 implies that the Indian economy will grow 6.9% in Oct-Mar. The Indian economy grew 8% in the first half of FY26, higher than expected. The RBI has projected GDP growth slowing to 7.0% in the December quarter and further down to 6.5% in the March quarter.
"ICRA believes that a potential contraction in the GoI's (government of India's) capex and the adverse impact of the US tariffs on merchandise exports across several sectors, along with an unfavourable base could moderate GDP growth in H2 FY2026 relative to H1," Agrawal said in a note.
Real GDP growth is seen rising in FY26 mainly because of higher investments and strong consumption demand. Higher growth in the services sector and manufacturing is also estimated to support GDP growth this year.
The services sector growth is seen at a three-year high of 9.1% this financial year against 7.2% in FY25. Agriculture is estimated to grow 3.1% in FY26, lower than 4.6% last year. Industry is estimated to grow 6.2% this year compared with 5.9% in FY25.
Within industry, the manufacturing and construction sectors are seen growing 7.0?ch in FY26. In FY25, the manufacturing and construction sectors expanded 4.5% and 9.4%, respectively. Mining sector is seen contracting 0.7% in FY26, the first contraction since FY21.
On the demand side, gross fixed capital formation is seen as the top performer this year. Capital formation is estimated to grow 7.8% in FY26 against 7.1% last year, while private final consumption growth is seen slowing down to 7.0% from 7.2% in FY25. Government consumption is estimated to grow 5.2% in FY26 against 2.3% in FY25.
This is the last GDP data released with the 2011-12 series. The statistics ministry will release the second advance estimate for FY26 and the December quarter GDP data on Feb. 27 with the new series which has 2022-23 as the base year.
The following table gives growth (in percentage) in GVA and its components and GDP for FY26 and FY25:
| 2025-26 | 2024-25 | |
| Agriculture | 3.1% | 4.6% |
| Industry | 6.2% | 5.9% |
| Mining | (-)0.7% | 2.7% |
| Manufacturing | 7.0% | 4.5% |
| Electricity, gas | 2.1% | 5.9% |
| Construction | 7.0% | 9.4% |
| Services | 9.1% | 7.2% |
| Trade, hotels | 7.5% | 6.1% |
| Financial services | 9.9% | 7.2% |
| Other services | 9.9% | 8.9% |
| GVA | 7.3% | 6.4% |
| GDP | 7.4% | 6.5% |
Source: Ministry of Statistics and Programme Implementation
The following table details the annual GDP growth (in %) in recent years as per the new series:
| YEAR | GROWTH RATE |
| 2025-26 | 7.4% |
| 2024-25 | 6.5% |
| 2023-24 | 9.2% |
| 2022-23 | 7.6% |
| 2021-22 | 9.7% |
| 2020-21 | (-)5.8% |
| 2019-20 | 3.9% |
| 2018-19 | 6.5% |
| 2017-18 | 6.8% |
| 2016-17 | 8.3% |
| 2015-16 | 8.0% |
| 2014-15 | 7.4% |
| 2013-14 | 6.4% |
| 2012-13 | 5.5% |
Source: Ministry of Statistics and Programme Implementation
End
Reported by Shubham Rana
Edited by Akul Nishant Akhoury
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