India’s economic activity strengthened further in the September quarter, with the Ministry of Statistics and Programme Implementation (MoSPI) saying the 8.2% Q2 GDP growth reflects broad-based expansion across manufacturing, services and investment.
MoSPI Secretary said the quarterly estimates were prepared using “700 indicators” and “100-odd sectoral and item-specific deflators,” noting that lower inflation was being faced by both consumers and producers.
Only mining and quarrying showed deceleration due to an extended monsoon impact, while services grew 9.2%, bank credit 10.2%, IT 11.5%, and the government sector 9.7%. Gross fixed capital formation rose 7.3%, maintaining a 30% share of GDP.
CEA: H1 growth near 8%, FY26 to be ‘north of 7%’
Chief Economic Adviser Anantha Nageswaran said the 8.2% print was “outside most of the optimistic projections,” adding that supply-side investments over recent years were beginning to show results. Rural demand, he said, remains “very resilient”, while urban consumption is gaining traction as GST rate rationalisation filters through.
“We haven’t seen this kind of inflation numbers in a very long time,” he said, calling India’s inflation softening a result of “bountiful supply”, not weak demand. He added that Q3 and Q4 nominal GDP growth “should be higher”.
Nageswaran said the stronger-than-expected first half has lifted confidence in the full-year outlook. “We are now talking about a growth rate which is either 7% or higher, that is a good situation to be in which is reflected in the GDP revisions by private sector agencies and this anchored in financial macro economic and fiscal prudence and that’s y this yr happens to be the one in which we got 3 credit ratings upgrades,” he added.
He flagged two risks: euphoric global equity markets — “something to watch out for” — and persistent geopolitical uncertainties that may shadow capital inflows.
Household and corporate balance sheets strengthen
Household savings flows in FY25 saw “a very big increase”, with household balance sheets showing a two-fold rise in equity and mutual fund allocations versus FY23. The CEA said the right balance between workers and employers created by the new labour codes should support formal hiring.
Outlook improves further
The government’s outlook slide highlighted:
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Firmer growth momentum led by manufacturing, services, festive demand and GST-led gains.
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Stable core inflation and strong Rabi sowing supporting food supply.
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GST collections up 9% Apr–Oct, indicating resilient revenue.
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Healthier corporate balance sheets, enabling stronger private capex in H2 FY26.
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A confluence of stable inflation, public capex and reforms positioning India for sustained growth.
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