India’s first advance estimates of gross domestic product, the first formal step towards framing the Union Budget, peg real GDP growth at 7.4% in FY26, up from 6.5% in FY25.
The momentum was driven by buoyant performance in the services sector, which helped real gross value added (GVA) growth rise to 7.3% in FY26, compared with 6.4% a year earlier.
On the nominal side, GDP growth for FY26 is estimated at 8%, lower than the 9.8% recorded in FY25 and marginally below the CNBC-TV18 poll estimate of 8.3%.
Sector-wise, manufacturing growth is seen accelerating to 7% from 4.5%, while agriculture growth is estimated at 3.1%, lower than 4.6% in FY25. Mining is projected to contract by 0.7%, compared with 2.7% growth last year, while electricity growth is seen slowing to 2.1%.
Construction growth is estimated at 7%, down from 9.4%, while trade, hotels and transport services are expected to grow 7.5%. Financial services, real estate and professional services are projected to expand 9.9%, matching the growth seen in public administration, defence and other services, underscoring the continued strength of the services-led recovery.
On the expenditure side, private final consumption expenditure (PFCE) growth is estimated at 7% in FY26, marginally lower than 7.2% in the previous year, indicating steady but moderated household demand. Government final consumption expenditure (GFCE) is seen growing 5.2%, sharply higher than 2.3% in FY25, reflecting increased public spending support.
Gross fixed capital formation, a key indicator of investment activity, is projected to rise 7.8%, up from 7.1% a year earlier, pointing to continued traction in capital expenditure. Exports growth is estimated at 6.4%, broadly in line with the 6.3% expansion seen last year.
From an output perspective, industries are estimated to grow 6.2% in FY26, compared with 5.9% in FY25, supported by improved manufacturing performance despite weakness in mining and electricity. Services remain the primary growth engine, with growth estimated at 9.1%, up from 7.2% last year.
