Prime Minister Narendra Modi on Wednesday said India’s “Reform Express” is gaining momentum, as official estimates projected a faster pace of economic growth in the coming financial year. According to provisional figures, real GDP is expected to expand by 7.4 per cent in FY 2025–26, compared with 6.5 per cent growth recorded in FY 2024–25.
Data released by the National Statistics Office (NSO) also showed that nominal GDP is estimated to grow at 8.0 per cent in FY 2025–26, reflecting steady economic activity across key sectors.
PM Modi links growth to reform push
Reacting to the numbers, Prime Minister Modi highlighted the role of policy-driven growth. In a post on X, he said: “This is powered by the NDA Government’s comprehensive investment push and demand-led policies”.
Emphasising the focus areas, the Prime Minister added, “Be it infrastructure, manufacturing incentives, digital public goods or ‘Ease of Doing Business’, we are working to realise our dream of a prosperous India”.
Services sector remains the main growth engine
Official estimates indicate that the services sector continues to be the strongest contributor to overall growth. Financial services, real estate, professional services and public administration are projected to grow by a robust 9.9 per cent at constant prices in FY 2025–26.
Trade, hotels, transport, communication and broadcasting-related services are estimated to record a growth of 7.5 per cent. In the secondary sector, manufacturing and construction are both expected to grow at around 7 per cent, while agriculture and allied activities are projected to expand by 3.1 per cent.
Consumption and investment show steady momentum
Private consumption is also expected to remain supportive of growth. Real Private Final Consumption Expenditure (PFCE) is estimated to rise by 7 per cent in FY 2025–26, aided by income tax exemptions announced in the Budget for 2025–26 and subsequent GST rate cuts across goods and services.
Investment activity is projected to stay resilient, with Gross Fixed Capital Formation (GFCF) estimated to grow by 7.8 per cent at constant prices during FY 2025–26, higher than the 7.1 per cent growth seen in the previous financial year.
India’s growth momentum had already shown signs of acceleration earlier in the year, with GDP expanding by 8.2 per cent in the July–September quarter, compared to 5.6 per cent in the corresponding period of FY 2024–25, according to figures released in November.