India's GDP to grow by 7.5% in FY26 with upside bias, says SBI report

India's economy is expected to grow at 7.5 per cent in 2025-26 with upward bias, marginally higher from NSO's estimate of 7.4 per cent, according to a report by State Bank of India.

The First Advance Estimates released by National Statistics Office (NSO) on Wednesday put GDP growth in 2025-26 at 7.4 per cent as compared to 6.5 per cent in the previous fiscal. The RBI has projected the growth rate at 7.3 per cent.

The gross value added (GVA) growth is estimated at 7.3 per cent and nominal GDP expansion at 8 per cent.

Historically, the difference between Reserve Bank's estimate and NSO's estimate is 20-30 basis points and hence the 7.4 per cent estimate is quite expected and reasonable, said the research report from SBI's Economic Research Department.

 

"We, however, believe that GDP growth for FY26 would be around 7.5 per cent with upward bias. The second advance estimates, incorporating additional data and revisions, are scheduled to be released on February 27, 2026.

"So, all these numbers are expected to change with the base revision to 2022-23," it said.

On fiscal deficit, the report said that at the end of November 2025 it stood at Rs 9.8 lakh crore or 62.3 per cent of budget estimate.

"We believe that even though the tax revenue is likely to be lower than that budgeted for FY26, non-tax revenue will be on the higher side thereby not impacting the overall receipts much," the report said.

Total expenditure is also expected to be lower, leading to fiscal deficit of Rs 15.85 lakh crore compared to the budgeted Rs 15.69 lakh crore, it said.

With the new GDP figure, fiscal deficit as percentage of GDP is likely to remain unchanged at 4.4 per cent, it added.