India’s GDP Set to Surpass 6.5% Growth with New Tax Cuts

### Quick Summary

– India’s real GDP growth is projected to exceed 6.5% in fiscal year 2025-26, according to Moody’s Ratings.
– Growth attributed to increased government capital expenditure, tax cuts, and reduced interest rates.
– Union Budget 2025-26 introduced significant tax relief; income up to Rs 12 lakh exempted from taxation.
– Expected GDP growth for FY26 is more then 6.5%, improving from the previous year’s estimate of around 6.3%.
– Banking sector outlook remains stable; slight deterioration in asset quality noted, especially in unsecured retail loans and microfinance.
– Loan growth expected to moderate at 11-13% in FY26.
– Inflation rate predicted to decrease from 4.8% (FY25) to 4.5% (FY26).
– RBI has cautiously lowered policy rate by a total of 275 basis points since May 2022.

ET Online

### Indian Opinion Analysis

the projected GDP growth surpassing over 6.5% holds positive implications for India’s economic trajectory amidst recent cyclical slowdowns. The government’s strategic focus on capital expenditure combined with fiscal measures such as tax cuts aims at boosting consumer spending—which is crucial for sustaining this momentum.

Stable outlooks for the banking sector despite moderate challenges reflect resilience but suggest a need for cautious management of emerging stresses in retail lending spaces.

A gradual approach towards further interest rate adjustments by the RBI indicates careful navigation through global uncertainties,ensuring inflation control while supporting economic expansion without aggressive monetary tightening.

these developments outline an optimistic yet cautious path forward where sustained policy support will be vital to achieving projected economic targets.

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