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NSO Reports India’s GDP Grows 7.8% in Q1 FY26, Highest in 5 Quarters, Surpassing RBI Projections.

Economy Business | Dated: 02 Sep 2025

In a highly anticipated release on August 29, 2025, the National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation, revealed that India’s Gross Domestic Product (GDP) grew by an impressive 7.8% in Q1 of FY 2025-26, marking the fastest quarterly expansion in five quarters.

🎯 Key Highlights:

  • - According to NSO data, India’s real GDP in Q1 FY26 (April–June 2025) stood at approximately ₹47.89 lakh crore, up from ₹44.42 lakh crore in Q1 FY25, while nominal GDP (GDP at current prices) rose to ₹86.05 lakh crore versus ₹79.08 lakh crore a year earlier. This robust expansion is noted as the strongest quarterly performance over the past five quarters.
  • - The growth momentum was broad-based, with agriculture and allied sectors posting a real GVA (Gross Value Added) growth of 3.7%, manufacturing rising 7.7%, and construction growing 7.6% over the same period last year. Services and other segments also contributed significantly, reinforcing the economy’s diverse expansion drivers.

💡 Other Important Facts:

  • (i) The NSO’s 7.8% growth rate exceeded both the Reserve Bank of India’s earlier projection of 6.5% and most private-sector expectations of around 6.7%, delivering a stronger-than-anticipated start to the fiscal year. Policy analysts attribute this upside surprise to lower-than-expected deflation, front-loaded government expenditures, and buoyant domestic demand.
  • (ii) Despite the upbeat figures, economists caution that the growth may not be sustainable. Concerns include the potential negative impact of looming U.S. tariffs on exports, possible slowdown in corporate earnings, and muted investor sentiment, with several pointing out that nominal GDP growth has lagged behind real GDP, affecting profitability and revenue projections.
  • (iii) Meanwhile, the Finance Ministry described the overall economic outlook as “steady as she goes,” citing strong domestic demand, healthy rural growth (aided by a favorable monsoon), and controlled inflation as supporting factors. Still, export headwinds, sluggish credit growth, and global uncertainties were flagged as areas requiring strategic policy attention for ensuring continued momentu.

📚 Test Your Knowledge:

According to the National Statistical Office (NSO), India’s GDP recently grew by how much in Q1 FY26, marking the highest in five quarters?

Correct Answer: 7.8%

🚀 Quick Recap: