India’s economy is likely to have expanded by around 7.5 per cent in the second quarter of FY26, supported by stronger investment activity, improving rural demand and the effects of GST rationalisation, according to a research report by the State Bank of India (SBI). As per news agency ANI, the report said growth continues to be driven by upbeat performances in both services and manufacturing, helped by structural reforms that have lifted demand.
Using its internal model, SBI stated, “Based on the estimated model, we obtain a nowcast of real GDP growth of ~7.5% in Q2FY26 with possibility of an upside surprise.” The bank added that GST rationalisation had helped create a strong festive environment, which “decisively showcased triumph of hope over hype,” reported ANI.The report noted that indicators across agriculture, industry and services have shown clear acceleration. The share of leading indicators signalling rising consumption and demand touched 83 per cent in Q2, up from 70 per cent in Q1, pointing to broad-based improvement in economic activity.On the fiscal side, the report said gross domestic GST collections for November 2025—reflecting October 2025 returns—may come in at around Rs 1.49 lakh crore, a year-on-year increase of 6.8 per cent. Including Rs 51,000 crore from IGST and cess on imports, total GST receipts for the month could exceed Rs 2.0 lakh crore. As per ANI, the bank attributed this to peak festive demand, reduced GST rates and better compliance, adding that most states are likely to record positive gains.SBI also highlighted a strong consumption boost during the festive months of September and October 2025 following GST rationalisation. The first signs of this were visible in credit and debit card spending patterns. Categories such as auto, grocery stores, electronics, furnishing and travel saw notable growth, particularly in e-commerce transactions. City-wise data suggested that demand has risen across regions, with mid-tier cities recording the fastest growth, supported by mostly positive e-commerce trends.
