Business

India’s GDP Growth Expected To Rise To 6.7% in FY26: Crisil Report

India’s GDP growth is projected to improve to 6.7% in FY26, according to a Crisil Intelligence report released on Monday. Declining food inflation and stable non-food inflation are expected to create conditions for a rate cut by the Reserve Bank of India (RBI) in the coming months.

Consumer Price Index (CPI) inflation cooled to 5.2% in December from 5.5% in November. Food inflation eased to 8.4% from 9%, while non-food inflation remained steady at 3.1%. The report forecasts CPI inflation to average 4.6% this fiscal, with a slight upside risk.

Industrial Output Shows Recovery

Industrial activity strengthened, with the Index of Industrial Production (IIP) rising to 5.2% in November from 3.7% in October. The improvement was driven by robust performance in investment goods and consumer durables, aided by a low base effect.

The National Statistical Office’s first advance estimates peg GDP growth for this fiscal at 6.4%, down from 8.2% last year.Crisil anticipates agricultural growth to rise, supported by higher reservoir levels that boost rabi output. This is expected to improve farm incomes and rural consumption. Increased agricultural production should also ease food inflation pressures, enhancing discretionary spending.

Lower crude oil prices, rate cuts by the RBI, and a normal monsoon are projected to further support economic growth in FY26. The report underscores these factors as key drivers of India’s GDP growth in FY26.

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Ajaypal Choudhary

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