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Key Points

Crisil has projected India’s GDP growth to reach 6.5% by the fiscal year 2026. This optimistic outlook is supported by anticipated improvements in domestic consumption, driven by healthy agricultural growth and easing inflation. Additionally, rate cuts by the RBI's Monetary Policy Committee and potential income tax relief are expected to bolster demand. While favorable economic conditions like an above-normal monsoon and subdued crude oil prices further support this forecast, external economic challenges could pose potential risks.

Key Points: Crisil Projects India GDP Growth at 6.5% by 2026

  • Crisil forecasts India GDP growth at 6.5% by 2026
  • Key supports include stronger domestic consumption and easing inflation
  • Favorable monsoon and RBI rate cuts expected to play crucial roles
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Crisil pegs India's GDP growth at 6.5 pc in fiscal 2026

Crisil forecasts India's GDP growth at 6.5% by 2026, driven by domestic demand and favorable economic conditions.

"Improving domestic consumption is likely to support industrial activity. - Crisil"

New Delhi, May 29

Crisil on Thursday forecast India’s gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, adding that improving domestic consumption is likely to support industrial activity.

“We expect domestic consumption demand to improve driven by healthy agricultural growth, easing inflation supporting discretionary spend, rate cuts by the Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) and income tax relief this fiscal,” the global ratings agency said in a note.

The India Meteorological Department expects an above-normal monsoon this fiscal (106 per cent of long-period average), which bodes well for agricultural production and inflation.

Furthermore, according to Crisil Intelligence, crude oil prices are expected to remain subdued this fiscal, averaging $65-$70 per barrel compared with an average of $78.8 per barrel in the prevoius fiscal.

“We expect the MPC to cut the repo rate by another 50 basis points (bps) this fiscal, after 50 bps cuts until April. Bank lending rates have begun easing, which should support domestic demand,” according to the note.

Overall, Crisil forecasts gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, with external headwinds posing downside risks.

In the month of significant tariff announcements by the United States (US), IIP growth slowed in April. Production slowed in certain export-oriented sectors (including pharmaceuticals and chemicals), while front-loading exports benefitted others (machinery and readymade garments). Among consumer goods, durables performed better than non-durables.

Industrial goods recorded a mixed performance, with output growth in capital goods picked up sharply along with a mild acceleration in intermediate goods.

Performance of export-oriented sectors was mixed in April, despite the sharp improvement in merchandise exports (9.0 per cent in April in nominal terms vs 0.7 per cent in the previous month).

There was also a 6.4 per cent increase in the production of consumer durables such as electronic goods, refrigerators, and TVs during November, reflecting the higher consumer demand for these items amid rising incomes, according to data released by the Ministry of Statistics.

The infrastructure sector clocked a growth of 4 per cent on the back of big-ticket government projects being implemented in the highways, railways and ports sectors.

—IANS

- IANS

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Reader Comments

R
Rajesh K.
Good news for our economy! 6.5% growth is decent considering global slowdown. But government must ensure benefits reach middle class - inflation is still pinching our pockets. RBI rate cuts will help home loans though 👍
P
Priya M.
Above-normal monsoon prediction is the best part! Our farmers will get relief after tough years. Hope MSPs are increased too. Agriculture growth means more money in rural markets which drives overall consumption. #JaiKisan
A
Amit S.
Why only 6.5%? With Make in India push and infra projects, we should target 7.5%+. Government needs to speed up reforms - labor laws still complex for MSMEs. Electronics production growth shows potential if we reduce Chinese imports.
S
Sunita R.
Consumer durables growth proves middle class is spending again! Bought new AC last month thanks to discounts. But non-durables lagging shows poor still struggling. Growth must be inclusive - govt should focus on rural healthcare & education too.
V
Vikram J.
Infrastructure growth at 4% is disappointing. With so many expressways & metro projects, expected higher numbers. Bureaucratic delays in projects must reduce. On positive side, lower crude prices will help reduce fiscal deficit yaar.
N
Neha T.
Mixed export performance is worrying with global tensions. Need to diversify beyond US/EU markets. Pharma sector must innovate more - China competition is tough. But overall, desi economy on right track! 🇮🇳

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