Govt may peg FY26 growth at 6.5-7%

Capex push, fiscal incentives and policy continuity expected to revive growth

- Rajeev Jayaswal

NEW DELHI: The government expects the economy to grow 6.5%-7% in 2025-26, regaining its momentum after sliding to a four-year low in terms of growth in 2024-25, people familiar with the numbers said, with the growth coming from a steady policy push that will be evident in the Union Budget presented on Saturday.

The people, who asked not to be identified, added that the budget would focus on the middle class, farmers, small enterprises, young people, and women.

The government is scheduled to table the Economic Survey—a report on the state of the country's economic health that also ventures a growth projection for FY26—on Friday, followed by the Union budget for 2025-26 on Saturday.

The budget is expected to focus on measures that will help the economy regain growth momentum to become the world's third largest during Prime Minister Narendra Modi's third term, the people said. The Indian economy is currently the world's fifth largest. The projected growth rate of India's gross domestic product (GDP) at 6.4% in 2024-25, compared to 8.2% in 2023-24, 7% in 2022-23 and 9.7% 2021-22 is one concern that needs to be addressed in the coming budget, they said. The first official advance estimates released on January 7 projected a growth rate in FY25 plunging to a four-year low, reflecting significant loss of momentum due to a slowdown in investment.