Chief Economic Adviser V Anantha Nageswaran expressed confidence that India’s economy will comfortably exceed its GDP growth projection of 6.8% in FY26, fuelled by recent GST and income tax reforms, rising private investment, and improving foreign capital inflows.
Speaking at the CNBC-TV18 Global Leadership Summit 2025, Nageswaran said, “I’m comfortable saying even north of 6.8% for India’s growth projection. My earlier range was 6.3% to 6.8%, but the current indicators suggest stronger momentum.”
The Economic Survey 2025, presented in Parliament earlier this year, had projected real GDP growth in the range of 6.3% to 6.8% for FY26.
Nageswaran’s latest remarks, however, reflect renewed optimism about India’s economic trajectory amid robust macroeconomic fundamentals.
Nageswaran highlighted that India’s growth could accelerate further once the India–US bilateral trade agreement is concluded.
He said, “At this point, I’m quite confident saying growth will definitely be above 6.5%, and I’m even comfortable projecting it to be above 6.8%. However, before I talk about a 7% figure, I’d prefer to wait for the second-quarter numbers to confirm that direction.”
According to the CEA, the government’s focus on fiscal prudence, infrastructure expansion, and sustained consumption growth has created a strong foundation for medium-term economic resilience.
GST Reforms to Boost Consumption
The Narendra Modi government’s latest GST rationalisation, effective from 22 September 2025, has reduced indirect taxes on several mass consumption goods.
The government restructured the rates to 5%, 18%, and an additional 40% on sin goods to stimulate consumer spending and simplify compliance for businesses.
These reforms have led to lower prices across essential goods and services, further boosting purchasing power and supporting small manufacturers and traders.
The income tax relief measures announced earlier this year have also strengthened disposable incomes, enhancing domestic demand.
India’s GDP grew by 7.8% in the first quarter ended 30 June 2025, outperforming most analysts’ expectations of 6.5%–7%.
The economy expanded 6.5% in the same period last year and 7.4% in the previous quarter, reflecting steady and broad-based growth.
Manufacturing, services, and infrastructure spending, along with resilient consumer demand and rising private investment, drove the strong performance.
With sustained momentum across key sectors, India’s economy remains one of the fastest-growing in the world.
The combination of tax reforms, trade liberalisation, and investment inflows is expected to propel GDP growth above 6.8% in FY26.
Nageswaran emphasised that continued policy stability, digital transformation, and clean energy investments will be crucial in sustaining India’s long-term growth story and achieving the goal of a $5 trillion economy in the coming years.
Also Read: GST Bachat Utsav Brings Relief To Artisans & Boosts India’s Cultural Economy
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