Daijiworld Media Network - New Delhi
New Delhi, Nov 24: India’s economy is projected to grow 6.5% in the current financial year, driven by strong domestic demand, recent tax cuts, and monetary policy easing, according to a report released Monday by S&P Global Ratings. Growth is expected to rise further to 6.7% in the next fiscal, with risks remaining balanced.
The report highlighted that India’s real GDP expanded 7.8% in the April–June quarter of FY26, marking the fastest growth in five quarters. The government is set to release GDP data for the July–September quarter on November 28.
S&P Global noted that domestic demand continues to support growth, despite the impact of US tariffs on Indian goods. A potential trade deal with the US could further boost investor confidence and benefit labour-intensive sectors.
The report also emphasized the positive effects of recent policy measures:
• GST cuts on nearly 375 essential and mass-use items in September.
• Income tax rebate limit increased from Rs 7 lac to Rs 12 lac in the 2025–26 Union Budget, saving middle-income households an estimated Rs 1 lac crore.
• RBI’s 50-basis-point rate cut in June, bringing the benchmark policy rate to 5.5%, its lowest in three years.
“Asia-Pacific growth should mostly hold up in 2026, but the room for further policy interest rate cuts is modest,” said Louis Kuijs, Asia-Pacific chief economist at S&P Global Ratings. He also cautioned that higher trade restrictions and industrial policies could weigh on trade, investment, and overall growth in the coming years.
The Reserve Bank of India has forecasted slightly higher GDP growth of 6.8% for FY26, reflecting optimism around strong domestic consumption and supportive economic policies.