Strong domestic demand-consumption led economic growth
India’s economy has continued to develop steadily, with the real GDP increased by 8.2%; in the second quarter of FY 2025–2026, Rajeev Juneja, President of PHDCCI, noted on 1 Dec, highlighting that the trend points towards India’s steady and robust development, boosted by structural policy reforms by the government.
The nominal GDP growth of 8.7% demonstrates India’s consistent progress towards Viksit Bharat@2047, he added.
The tertiary sector’s rise was the main driver of this expansion, followed by the secondary sector. For Q2 FY 2026, the manufacturing sector expanded by 9.1% (Y-o-Y), while the tertiary sector had strong growth of 9.2%. Within the tertiary sector, the financial, real estate & professional services grew at 10.2% (Y-o-Y) for the same period.
The continuous rise in Gross Fixed Capital Formation (GFCF), which increased by 7.3% in Q2 FY2026, indicates the government’s CAPEX expenditure impetus, giving a positive push to productive capacity. Private final consumption spending increased by 7.9% during the same period, indicating that strong domestic demand and consumption led the push for economic growth, he said.
The persistent and consistent GDP growth of India reflects significant policy steps undertaken by the government towards Viksit Bharat@2047. Y-o-Y growth is showing a consistent uptrend in GDP at market prices for last four consecutive quarters. It increased from 6.37% in Q3 FY 2024-2025 to 8.23% in Q2 FY 2025-2026.
Based on sequential quarter-on-quarter growth, GDP growth after a dip in Q1 FY2025-26 (-6.7%) is moving towards its long-term mean reversion growth rate of 1.7%.
India’s GDP trajectory is also being supported by robust consumption, and a planned decrease in MPC rates along with a softening trend of CPI and WPI inflation, he added.
According to Dr Ranjeet Mehta, CEO & Secretary General, PHDCCI, the government’s ongoing focus on improving ease of doing business, bolstering supply chains, and structural reforms is anticipated to accelerate India’s development momentum. Fiinews.com
