India's Economy To Grow by 7.4% In FY26, Driven Largely By Service Sector: NSO Data

The Real GDP has been estimated to grow by 7.4% in the Financial year 2025-26 against the growth rate of 6.5% during FY 2024-25, as per the first advance estimates released by the National Statistics Office (NSO) on Wednesday.

The Nominal GDP is estimated to grow at 8% in FY 2025-26, it said.

Real GDP is estimated to attain a level of Rs 201.90 lakh crore in FY26, against the Provisional Estimates (PE) of GDP for FY25 of Rs 187.97 lakh crore, while the Nominal GDP is estimated to reach Rs 357.14 lakh crore in FY 2025-26, up from Rs 330.68 lakh crore in FY 2024-25.

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Further, the Real Gross Value Added (GVA) is estimated at Rs 184.50 lakh crore in FY 2025-26, up from the Provisional Estimates for FY 2024-25 of Rs 171.87 lakh crore, reflecting a 7.3% growth rate. 

Nominal GVA is estimated to reach Rs 323.48 lakh crore in FY 2025-26, up from Rs 300.22 lakh crore in FY 2024-25, reflecting a 7.7% growth rate. Nominal GDP uses current prices, including inflation, while Real GDP adjusts for inflation using base-year prices, showing true output growth.

The NSO said the growth momentum is being driven largely by the services sector, with real Gross Value Added (GVA) projected to expand by 7.3%. Financial, real estate, and professional services, along with public administration, defence, and other services, are estimated to grow by a robust 9.9% at constant prices during the year.

Manufacturing and construction are also expected to support overall growth, with the secondary sector projected to grow by 7.0%, while trade, hotels, transport, communication, and broadcasting services are projected to expand by 7.5%. In contrast, the agriculture and allied sector is estimated to post a more moderate growth of 3.1%. 

On the demand side, private final consumption expenditure (PFCE) is estimated to grow by 7.0%, reflecting steady household spending. Gross fixed capital formation (GFCF), a key indicator of investment activity, is projected to rise by 7.8%, up from 7.1% in the previous fiscal year.