The RBI has raised its projection of India’s GDP growth rate to 6.8 per cent for 2025-26 from 6.5 per cent earlier, as the implementation of several growth-inducing structural reforms, including streamlining of GST, is expected to offset some of the adverse effects of the external headwinds, Governor Sanjay Malhotra said on Wednesday.
On the supply side, growth in gross value added (GVA) at 7.6 per cent was led by a revival in manufacturing and steady expansion in services. Available high-frequency indicators suggest that economic activity continues to remain resilient. Rural demand remains strong, riding on a good monsoon and robust agriculture activity, while urban demand is showing a gradual revival, the RBI Governor added.
He also said that the global economy has been more resilient than anticipated in 2025, with robust growth in the US and China.
The RBI Governor further stated that revenue expenditure of the Union and state governments registered robust growth during the fiscal year so far (April-July). Investment activity, as suggested by healthy growth in construction indicators, i.e., cement production and steel consumption in July-August, is holding up well even though production and import of capital goods witnessed some moderation. Recovery in the manufacturing sector continues while services activity is sustaining its momentum.
