SBI Ecowrap Analysis: India

New Delhi : According to the latest SBI Ecowrap report, India’s economic momentum is set to remain robust, with GDP growth expected to outperform official projections for the current fiscal year. While the National Statistical Office (NSO) has released its first advance estimate (AE) pegging the real GDP growth at 7.4% for FY26 (up from 6.5% in FY25), SBI Research believes the final figure will likely settle around 7.5% with an upward bias. Analysts suggest that these figures are poised for further upward revision once the data incorporates the new base year of 2022-23.

A deep dive into the sectoral performance reveals that the Services Sector continues to be the primary catalyst for growth, with an estimated expansion of 9.1% in FY26. High-performing sub-sectors such as 'Financing, Real Estate, and Business Services' are leading the charge with a growth rate of 9.9%. Furthermore, the report highlights a significant recovery in investment demand, with Gross Fixed Capital Formation growing at 7.8% in real terms—a 70 basis point increase compared to the previous year.

The economic surge is also translating into improved individual prosperity, with per capita national income projected to increase by ₹16,025 annually, reaching ₹2,47,487 in FY26. However, the report notes a relative slowdown in the 'Agriculture and Allied' sector, which is expected to grow at 3.1% compared to 4.6% last year, leading to a slightly moderated private consumption growth of 7.0%.

On the fiscal front, SBI Research maintains a positive outlook despite a projected shortfall in tax revenues. The report indicates that robust non-tax revenue collections will likely offset these gaps, keeping the overall fiscal deficit unchanged at 4.4% of GDP. Despite external headwinds, the fiscal arithmetic remains stable, supported by a recovery in manufacturing and steady government consumption expenditure, which grew by 5.2% in real terms.