India's economy is expected to have grown by around 7.5 percent in the second quarter of the current financial year FY26, supported by a pick-up in investment activities, an improvement in rural consumption and the impact of GST rationalization, according to a research report by the State Bank of India (SBI).
The report noted that growth continues to be underpinned by buoyancy in both services and manufacturing sectors, alongside structural reforms that have strengthened demand conditions.
It 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".
It added that GST rationalization helped unleash a strong festive spirit, which "decisively showcased triumph of hope over hype."
The report highlighted that indicators across agriculture, industry and services have shown notable acceleration. The share of leading indicators reflecting growth in consumption and demand increased to 83 per cent in Q2, compared with 70 per cent in Q1, pointing to broad-based improvement in economic activity.
Based on its estimated model, SBI's nowcast projects real GDP growth of nearly 7.5 per cent in Q2 FY26, with a possibility of an upside surprise if underlying momentum sustains.
On the fiscal front, the report said gross domestic GST collections for November 2025 (pertaining to October 2025 returns) may come around Rs 1.49 lakh crore, marking a year-on-year rise of 6.8 per cent.
Including Rs 51,000 crore from IGST and cess collected on imports, total GST receipts for November could cross Rs 2 lakh crore.
The bank attributed this to peak festive season demand, lower GST rates and improved compliance, adding that most states are likely to see positive gains.
The report also pointed to a major consumption boost during the festive months of September and October 2025 following GST rationalization. The first signs of this, it said, emerged from an analysis of credit and debit card spending patterns.
In credit card usage, categories such as auto, grocery stores, electronics, furnishing and travel registered strong growth, particularly in the e-commerce segment.
City-wise data indicated that demand has risen across regions, with mid-tier cities showing the fastest growth, supported by largely positive e-commerce sales trends.
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