Whalesbook
India's Economic Outlook Brightens
State Bank of India (SBI) forecasts India's economy will achieve robust growth in the fiscal year 2026, potentially exceeding current official figures. The projection hinges on a forthcoming revision of the GDP base year to 2022-23, a move expected to enhance the growth trajectory.
Revised Growth Figures
The National Statistical Office (NSO) currently estimates real GDP growth at 7.4% for FY26, an increase from the 6.5% recorded in FY25. SBI's analysis suggests this figure could climb closer to 7.5%, with further upside potential after the base year adjustment. The bank noted that historical data shows a narrow variance between Reserve Bank of India and NSO growth estimates.
The second advance estimates, due February 27, 2026, are anticipated to incorporate these revisions. This anticipated upward adjustment aligns with expectations for sustained economic momentum. Per capita national income is projected to rise by ₹16,025 annually, reaching ₹2,47,487 in FY26.
Sectoral Performance Divergence
While the services sector is set to be the main engine of growth, projected to expand by 9.1% in FY26 from 7.2% last year, other sectors show varied performance. Agriculture and allied activities are expected to moderate, with growth slowing to 3.1% from 4.6% in FY25. Industrial growth is forecast to tick up marginally to 6.0% from 5.9%, driven by manufacturing output at 7.0%. However, the mining sector is predicted to contract by 0.7% after growing 2.7% in FY25.