A Crisil report on Monday projected India’s gross domestic product (GDP) to grow at 6.5 per cent this fiscal (FY26), supported by improving domestic consumption, among other positive indicators.
The Crisil Intelligence’s near-term outlook report suggested US tariff-related global uncertainty as the top risk to India’s growth. “However, growth is expected to be supported by improving domestic consumption driven by an above-normal monsoon, income tax relief and the RBI MPC’s rate cuts,” the report mentioned.
GDP growth accelerated to 7.4 per cent on-year in the fourth quarter of last fiscal from 6.4 per cent in the previous quarter. Overall, GDP grew 6.5 per cent last fiscal (FY25).
Consumer Price Index (CPI) inflation slid to 2.1 per cent in June, the lowest in 77 months, as food inflation turned negative.
“Based on the inflation trajectory, prediction of an above-normal monsoon, and the expectation of soft global oil and commodity prices, we expect CPI inflation to soften to 4 per cent on average this fiscal from 4.6 per cent last fiscal,” the report mentioned.
The report expects one more RBI repo rate cut this fiscal, and a pause thereafter.
“The MPC cut the rate by 100 bps between February and June 2025. Its change in stance from accommodative to neutral in June highlights the front-loading of rate cuts and the data-dependent approach hereon The 100 bps CRR cut will be implemented in four tranches between September and November 2025,” it mentioned.
On fiscal health, the Union Budget has targeted a reduction in the central government’s fiscal deficit to 4.4 per cent of GDP this fiscal from 4.8 per cent last fiscal.
“Gross market borrowing is estimated at Rs 14.8 lakh crore for this fiscal, 5.8 per cent higher on-year. The government plans to carry out 54 per cent of the budgeted borrowing in the first half of the fiscal,” said the report.
Fiscal deficit stood at 0.8 per cent of this fiscal’s Budget target until May, lower than 3.1 per cent in the corresponding period last fiscal, driven by higher revenue receipts and lower revenue expenditure than last fiscal.
The report further stated that it expects the current account deficit (CAD) to average 1.3 per cent of GDP this fiscal, compared with 0.6 per cent last fiscal.
