India's economy expected to grow at least 7% in FY26: FM Sitharaman

By Anup Roy

 

India’s growth momentum is set to continue, and the government expects the economy to expand by at least 7 per cent in the financial year through March, Finance Minister Nirmala Sitharaman said. 

The government had projected 6.3 per cent to 6.8 per cent growth for the current financial year. Chief Economic Adviser Anantha Nageswaran upgraded his forecast late last month to at least 7 per cent after data showed an expansion of more than 8 per cent in the three months through September. Economists also revised their predictions upwards to 7 per cent to 7.5 per cent.

 

“We saw the growth numbers for the second quarter,” Sitharaman said at the Hindustan Times Leadership Summit on Saturday. “I think that will sustain, and overall this year’s growth numbers will be 7 per cent or beyond it as well.”

 

The Reserve Bank of India cut the interest rate by 25 basis points to 5.25 per cent on Friday and lowered its inflation forecast for the fiscal year to 2 per cent from 2.6 per cent, while raising its growth projection to 7.3 per cent from 6.8 per cent. Sitharaman acknowledged at the summit that some degree of price rises was necessary to stimulate growth. 

 

The finance minister did not want to be drawn into the value of the rupee, which fell to a record of above 90 per US dollar this week, calling the topic “too sensitive.” The currency will “have to find its own level,” she said.

 

India also plans a complete overhaul of its customs duty structure, the finance minister said. “We need to have customs that is a lot more simplified for people to feel it is not too cumbersome to comply with the rules,” she said, adding that the rules should be more transparent.