Overview
The GDP for FY 2025‑26 is provisionally estimated at 7.7%, up from 7.1% in FY 2024‑25. The fourth quarter (Q4) of 2025‑26 recorded a growth of 7.8%. These figures were released by the MoSPI on 5 June 2026.
Key Developments
- Provisional FY 2025‑26 GDP growth revised up to **7.7%** from the earlier **7.6%** estimate.
- Q4 2025‑26 growth accelerated to **7.8%**, higher than the previous year’s **6.3%**.
- RBI Governor Sanjay Malhotra projects FY 2026‑27 growth to slow to **6.6%**.
- Manufacturing sector growth estimated at **10.7%** for FY 2025‑26; services sector (trade, repair, hotels, transport, communication & broadcasting) at **11%**.
- Agriculture growth expected to dip to **3%** in FY 2025‑26.
- Private final consumption expenditure (PFCE) rose to **7.7%**.
- Gross fixed capital formation (GFCF) increased to **8.2%**.
Important Facts
The government updated the base year of national accounts to FY 2022‑23 and refined the methodology, improving comparability. Prime Minister Narendra Modi highlighted the growth as evidence of reforms and the “hard work of 140 crore Indians”. Finance Minister Nirmala Sitharaman pointed out double‑digit growth in manufacturing, trade, hotels, transport, communication, real‑estate and professional services.
The CEA V. Anantha Nageswaran said the RBI’s GDP and inflation estimates are “fair” and should not be second‑guessed.
UPSC Relevance
- Understanding the drivers of GDP growth helps answer GS‑III questions on economic performance.
- Sector‑wise growth rates (manufacturing, services, agriculture) illustrate structural changes, a common topic in the Economy paper.
- The role of the RBI in forecasting growth links to monetary‑policy discussions.
- Data revisions and base‑year updates are relevant for questions on statistical systems and the work of MoSPI.
Way Forward
Economists warn that FY 2026‑27 growth may be pressured by a West‑Asia crisis and a weaker monsoon. Policy focus will likely shift to sustaining investment, stabilising external conditions, and supporting agriculture to mitigate the slowdown. Aspirants should monitor subsequent RBI policy statements and government fiscal measures for their impact on the macro‑economic outlook.