Indian Economy Projected to Grow at 6.5% in FY26

Key Points from the EAC-PM Chairman's Statement

Growth Drivers:

Low Inflation: A favorable monsoon and a supportive interest rate environment, bolstered by three successive rate cuts by the Reserve Bank of India (RBI), are expected to keep inflation in check.

Government Initiatives: Increased government capital expenditure, tax reductions, and measures announced in recent budgets are anticipated to boost investment and consumption.

Monetary Policy: Additional support will come from reductions in both interest rates and the cash reserve ratio (CRR) by the RBI.

Sectoral Performance: Strong growth is expected in agriculture and services, with manufacturing projected to improve in the coming years.

Resilience Amid Global Headwinds:

Dev acknowledged the "twin shocks" of global geopolitical tensions and trade policy uncertainties but stated that the Indian economy remains the fastest growing among major economies, thanks to sound fiscal management and macroeconomic stability.

Domestic Tailwinds:

Several positive factors are expected to raise both rural and urban demand, including increased public capital expenditure and good monsoon forecasts