GDP Growth at Four-Year Low

THEY HELD UP in the last two quarters of the year with growth of 6.1% and 5% respectively, mainly on the strength of the farm sector.

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With record food grains production predicted for the upcoming kharif season and above-normal monsoon, farming prospects could remain bright in the current fiscal too.

For the current year, however, many analysts see the growth to slip below 6.5%, given the severe external headwinds.

The finance ministry, in its latest monthly report, expressed hope that income tax cuts in the FY26 Budget, coupled with the possibility of more rate cuts by the Reserve Bank of India (RBI) in a benign inflation scenario would stimulate consumption and investment to lift FY26 growth towards the upper end of its forecast range of 6.3-6.8%.

The supply chain rejig underway owing to the tariff tensions, possible gains from China+1 strategy and the chances of the soon-to-be-inked trade agreement with the US "flipping the headwinds to tailwinds" are the reasons for the optimism.

The need for key structural changes in the economy and better coordination between the Union and state governments is being felt.