GDP growth
India's economic growth in FY26 may be higher than current official estimates when the government adopts the new GDP base year. Currently, according to the first advance estimate of the National Statistical Office, real GDP growth for FY26 is 7.4%, which is more than 6.5% in FY25. Gross value added growth is expected to be 7.3%, while nominal GDP growth is expected to be 8%.
According to SBI, it is known that after changing the base year to 2022-23, the pace of growth may increase further. The report says that GDP growth in FY26 could be close to 7.5% and it is likely to increase further after the arrival of the new base year. The bank said that the second advance estimate, which will include more data and changes, will be released on February 27, 2026. Changes in these estimates due to change in base year are expected to be visible. Talking about past trends, the report said that the difference between the GDP growth projections of the Reserve Bank of India and the NSO has always been in the small range of 20-30 basis points.
In this background, SBI said that NSO's current estimate of 7.4% growth for FY26 seems reasonable and matches most of the expectations. The report also points to improvements in income levels, with per capita national income expected to increase annually by Rs 16,025 to Rs 2,47,487 in FY26, reflecting the pace of expected growth. Sector-wise projections show that there will be a slowdown in agriculture and allied activities, which are expected to grow at 3.1% in FY26, compared to 4.6% last year. The services sector is expected to drive overall growth. This sector is estimated to grow at 9.1% in FY26, which is much higher than last year's 7.2% growth.
SBI said that growth in all service sub-sectors is expected to be higher than last year. Industrial growth is estimated at 6.0% in FY26, slightly higher than 5.9% growth in FY25, supported by strong manufacturing output growth of 7.0%. However, a sharp decline is expected in the mining sector, with output projected to decline by 0.7% in FY26 compared to 2.7% growth in FY25. It has been said in the SBI report that the upcoming changes and the beginning of the new base year may bring further changes in the current growth estimates.
