New Delhi — India’s economy expanded 7.8% in the first quarter of fiscal year 2026-27, with economists pointing to strong consumption, investment and government capital spending as key drivers of the better-than-expected growth.
Ranjeet Mehta, CEO and Secretary General of the PHD Chamber of Commerce and Industry, said the figures highlighted the resilience of the Indian economy and showed that growth was spread across several areas.
“India’s GDP growth in the first quarter of 2026-27 is a strong reflection of the resilience of the Indian economy. The growth has been broad-based, including 11.9 per cent gross capital formation. It’s really, really very encouraging,” Mehta said.
The 7.8% growth rate also exceeded expectations among economists and analysts.
Pankaj Sharma, Business Head – North, Corporate and Infrastructure, at CareEdge Ratings, said the stronger reading came as a surprise and reflected a significant pickup in investment. He also pointed to the government’s decision to front-load capital expenditure during the quarter.
CareEdge Ratings Chief Economist Rajani Sinha described the GDP figure as a “big positive surprise,” saying the agency had projected growth of about 7.3% for the quarter.
Sinha said high-frequency economic indicators had already signaled resilience, but the final GDP number was stronger than anticipated.
She attributed the expansion in household consumption to a combination of income-tax rationalization, GST rationalization and relatively low inflation over the past year.
Investment growth was also supported by a continued focus on capital expenditure by both the central and state governments, she said.
Sinha added that several economic indicators pointed to continued strength in manufacturing, including auto sales, core sector growth and the Index of Industrial Production.
The manufacturing sector’s performance in the GDP data reinforced the view that the first-quarter expansion was broad-based rather than dependent on a single part of the economy. (Source: IANS)
