The Indian economy is expected to grow at 6.7 per cent in April-June period of current fiscal, higher than 6.5 per cent a year ago, on the back of higher government capex and exports, rating agency Icra said on Tuesday.
This projection also outpaces the RBI's Monetary Policy Committee's (MPC's) forecast of 6.5 per cent growth in the June quarter. India's economy grew 7.4 per cent in March quarter of FY25.
Official data for FY26 Q1 GDP is scheduled to be released on August 29.
Icra Chief Economist Aditi Nayar said investment activity held up in Q1 FY2026 was boosted by the front-loading of government capex. Although, this admittedly came on a low base amidst the heightened uncertainty owing to geopolitical tensions and tariff-related developments.
"Benefitting from robust government capital as well as revenue spending, upfronted exports to some geographies and nascent signals of improved consumption, the pace of expansion in economic activity in Q1 FY2026 is estimated at 6.7 per cent," Nayar said.
She however cautioned against tapering off of GDP growth in the subsequent quarter amid continuing tariff-induced uncertainty for exports and private capex. This will limit India's GDP expansion at 6 per cent in current fiscal.
Based on the CGA data, the government's gross capital expenditure spiked 52 per cent Y-o-Y to Rs 2.8 lakh crore in June quarter. Further, the value of new project announcements nearly doubled to Rs 5.8 lakh crore from Rs 3 lakh crore in Q1 FY2025.
