India’s GDP Projected to Grow 7.4% in FY 2025-26
The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) has released the First Advance Estimates of Gross Domestic Product (GDP) for the Financial Year (FY) 2025-26. These estimates include insights into various expenditure components at both Constant (2011-12) and Current Prices, alongside annual Gross Value Added (GVA) figures for various sectors across the economy.
According to the estimates, India’s Real GDP is expected to grow by 7.4% in FY 2025-26, an increase from the 6.5% growth recorded in FY 2024-25. In nominal terms, GDP is projected to rise by 8.0%, reaching approximately ₹357.14 lakh crore, up from ₹330.68 lakh crore in the previous fiscal year.
Sectoral Growth Highlights
The buoyancy in the services sector emerges as a significant contributor to the overall economic growth, anticipating a Real GVA growth rate of 7.3% in FY 2025-26. Notably, the Financial, Real Estate, and Professional Services, along with Public Administration and Defence, are expected to experience a remarkable growth rate of 9.9% at Constant Prices.
The Trade, Hotels, Transport, Communication, and related sectors are also set to grow, estimated at 7.5% at Constant Prices. Furthermore, the Secondary Sector, which encompasses Manufacturing and Construction, is projected to achieve a growth rate of 7.0%. In contrast, the Agriculture & Allied sector and the Electricity, Gas, Water Supply & Other Utility Services sector are expected to see more modest growth rates of 3.1% and 2.1% respectively for the same year.
Consumption and Investment Trends
Real Private Final Consumption Expenditure (PFCE) is projected to grow by 7.0% during FY 2025-26. The Gross Fixed Capital Formation (GFCF) is also on an upward trajectory, anticipated to have a growth rate of 7.8% at Constant Prices, an increase from the 7.1% growth experienced in the previous fiscal year.
In terms of comprehensive annual estimates, Real GDP is projected to reach ₹201.90 lakh crore, compared to the Provisional Estimates (PE) of ₹187.97 lakh crore for FY 2024-25. Real GVA is expected at ₹184.50 lakh crore for FY 2025-26, in comparison to ₹171.87 lakh crore noted in the previous fiscal year’s provisional estimates.
Methodology Behind the Estimates
These GDP and GVA estimates are compiled using a benchmark-indicator method that extrapolates data from various economic sectors based on indicators reflecting their performance. Key data sources for this compilation include the Index of Industrial Production, financial performance reports from listed companies, agriculture production estimates, and transportation statistics. As the Ministry progresses toward revising the base year of National Accounts to FY 2022-23, further adjustments are anticipated.
The Second Advance Estimates of GDP for FY 2025-26 are scheduled for release on February 27, 2026, along with updates on GDP estimates from the past three financial years.
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