Mumbai, Dec 5 (NationPress) The Reserve Bank of India (RBI) announced on Friday that it has elevated its GDP growth projection for the Indian economy to a strong 7.3 percent for the fiscal year 2025-26, up from the previous estimate of 6.8 percent. This revision stems from a positive outlook bolstered by robust agricultural performance, ongoing GST rate reductions, low inflation rates, and solid financial health among both corporations and banks.

During a press briefing following the monetary policy committee meeting, RBI Governor Sanjay Malhotra remarked that the economic growth spurt to 8.2 percent in the second quarter of the current fiscal year, alongside a significant drop in inflation to 1.7 percent, has created an exceptional “Goldilocks period” for the Indian economy.

“Looking forward, domestic factors such as strong agricultural prospects, the sustained impact of GST reforms, low inflation, and healthy financial statements of companies and financial institutions, along with favorable monetary and financial conditions, are expected to continue fostering economic activity. Ongoing reform efforts will further promote growth,” explained Malhotra.

He also highlighted that while service exports are anticipated to remain robust, merchandise exports could face some challenges. Ongoing external uncertainties continue to present risks to the outlook, although the swift conclusion of various trade and investment negotiations offers potential advantages.

“Considering all these factors, the real GDP growth for 2025-26 is now projected at 7.3 percent, with Q3 at 7.0 percent and Q4 at 6.5 percent. For Q1:2026-27, a growth of 6.7 percent is projected, followed by 6.8 percent in Q2. The risks are evenly balanced,” stated the RBI Governor.

Malhotra noted that the nation’s real GDP achieved a six-quarter high growth of 8.2 percent in Q2:2025-26, driven by resilient domestic demand amidst global trade and economic uncertainties. On the supply side, real gross value added (GVA) grew by 8.1 percent, supported by strong industrial and services performance. Economic activities in the first half of the fiscal year benefited from income tax and goods and services tax (GST) reforms, lower crude oil prices, accelerated government capital spending, and supportive monetary conditions underpinned by low inflation.

He further indicated that high-frequency indicators suggest that domestic economic activity is holding steady in Q3, although some early signs of weakness have emerged in a few leading indicators. GST reforms and festival-related expenditures have bolstered domestic demand during October-November. Rural demand remains strong while urban demand is gradually improving. Investment activities are robust, with private investments gaining momentum, supported by an increase in non-food bank credit and high capacity utilization.

On the supply front, agricultural growth is enhanced by strong kharif crop yields, better reservoir levels, and improved sowing of rabi crops. Manufacturing activities are on the rise, and the services sector continues to progress steadily, he added.