RBI projects 6.7% growth for FY'26 due to strong Rabi harvest and tax relief
ECONOMY & POLICY

RBI projects 6.7% growth for FY'26 due to strong Rabi harvest and tax relief

The Reserve Bank of India (RBI) has projected the growth rate for the upcoming financial year 2025-26 at 6.7 per cent, an increase from the estimated 6.4 per cent for the current fiscal year. The expected growth will be supported by favourable Rabi crop prospects and a recovery in industrial activity. Household consumption is anticipated to remain strong, bolstered by the tax relief measures announced in the Union Budget 2025-26. These measures include significant tax cuts for the middle class, designed to stimulate consumption after the economy experienced its slowest growth since the pandemic.

India's GDP growth slowed to a 7-quarter low of 5.4 per cent in the July-September period of the current fiscal year, below the RBI's projection of 7 per cent. The GDP growth rate of 6.4 per cent for 2024-25 will be the lowest since the pandemic year of 2020-21, when the economy contracted by 5.8 per cent. The economy had rebounded to 9.7 per cent growth in 2021-22, followed by 7 per cent in 2022-23, and 8.2 per cent in 2023-24.

The Union Budget introduced an increase in the personal income tax exemption limit, now set at Rs 1.2 million, up from Rs 0.7 million, along with tax bracket adjustments that could save high earners up to Rs 0.1 million. Fixed investment is expected to recover due to higher capacity utilisation, strong financial institutions, and continued government focus on capital expenditure. The RBI's growth projection for 2025-26 includes quarterly estimates of 6.7 per cent in Q1, 7.0 per cent in Q2, and 6.5 per cent in Q3 and Q4, with balanced risks.

The Economic Survey had earlier projected a GDP growth range of 6.3-6.8 per cent for 2025-26, supported by strong macroeconomic fundamentals and prudent policy management. The GDP growth for the current year is estimated to reach a four-year low of 6.4 per cent, close to the decadal average.

News source: The Week

The Reserve Bank of India (RBI) has projected the growth rate for the upcoming financial year 2025-26 at 6.7 per cent, an increase from the estimated 6.4 per cent for the current fiscal year. The expected growth will be supported by favourable Rabi crop prospects and a recovery in industrial activity. Household consumption is anticipated to remain strong, bolstered by the tax relief measures announced in the Union Budget 2025-26. These measures include significant tax cuts for the middle class, designed to stimulate consumption after the economy experienced its slowest growth since the pandemic. India's GDP growth slowed to a 7-quarter low of 5.4 per cent in the July-September period of the current fiscal year, below the RBI's projection of 7 per cent. The GDP growth rate of 6.4 per cent for 2024-25 will be the lowest since the pandemic year of 2020-21, when the economy contracted by 5.8 per cent. The economy had rebounded to 9.7 per cent growth in 2021-22, followed by 7 per cent in 2022-23, and 8.2 per cent in 2023-24. The Union Budget introduced an increase in the personal income tax exemption limit, now set at Rs 1.2 million, up from Rs 0.7 million, along with tax bracket adjustments that could save high earners up to Rs 0.1 million. Fixed investment is expected to recover due to higher capacity utilisation, strong financial institutions, and continued government focus on capital expenditure. The RBI's growth projection for 2025-26 includes quarterly estimates of 6.7 per cent in Q1, 7.0 per cent in Q2, and 6.5 per cent in Q3 and Q4, with balanced risks. The Economic Survey had earlier projected a GDP growth range of 6.3-6.8 per cent for 2025-26, supported by strong macroeconomic fundamentals and prudent policy management. The GDP growth for the current year is estimated to reach a four-year low of 6.4 per cent, close to the decadal average. News source: The Week

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code