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ICRA Senior Economist Rahul Agrawal on FY26 GDP estimate
This story was originally published at 17:02 IST on 7 January 2026
Register to read our real-time news.Informist, Wednesday, Jan. 7, 2026
NEW DELHI – Rahul Agrawal, senior economist, ICRA Ltd., said the following on the government's first advance estimate of India's GDP growth for 2025-26 (Apr-Mar) of 7.4%:
The National Statistical Office's First Advance Estimate pegged India's GDP and GVA to grow by 7.4% and 7.3%, respectively, in FY26, in line with ICRA's estimate for the fiscal, notwithstanding some differences in the sectoral estimates. Accordingly, it has implicitly pegged the growth in the GDP and GVA for Oct-Mar FY26 at 6.9% and 6.8%, respectively, indicating a slowdown from the 7.9-8.0% growth seen in Apr-Sept FY26. ICRA believes that a potential contraction in the government'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 Oct-Mar FY26 relative to Apr-Sept.
ICRA expects the growth in the industrial and agricultural sectors to fare somewhat better than the National Statistical Office's implicit estimate for Oct-Mar of FY26, while services growth is likely to trail the same.
Interestingly, the National Statistical Office estimates the nominal GDP to expand by 8.0% in FY26, lower than our estimate of 8.5% for the fiscal. Notably, the first advanced estimates for the nominal GDP for FY26 is pegged at INR 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. ICRA 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. End
Compiled by Priyasmita Dutta
Filed by Tanima Banerjee
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