Amidst the ongoing turmoil in the world, India’s economy is riding on the chariot of continuous growth. The economic figures recently released by the government show that the pace of development in the country continues. Be it the sharp growth in GDP, expansion of manufacturing and service sector, record vehicle sales or strong GST collection and good export figures. All these figures indicate that demand and investment are continuously increasing in the country.
Strong growth in GDP
India’s economy grew at the rate of 7.7% in the financial year 2025-26. With this, India remained the fastest growing large economy in the world. Growth further accelerated in the last quarter (Q4) of the financial year 2025-26. real during this GDP It stood at 7.8%, whereas in the same quarter last year it was 7.0%. Manufacturing, service sector, consumer spending and investment contributed significantly to this growth.
Continuous growth in manufacturing sector
HSBC India Manufacturing PMI in June 2026 was 54.2. It remained above 50 points for the 37th consecutive month, indicating continued expansion in manufacturing activities. According to the survey, there was a continuous increase in production, new orders, employment and purchasing activities. This shows that despite global uncertainties, domestic demand remains strong and business confidence is also intact.
Service sector becomes the main basis of development
HSBC India Services PMI Business Activity Index increased from 58.8 in April to 59.8 in May 2026. This is the fastest expansion after November 2025. According to the survey, this improvement was seen due to better demand, addition of new customers and increase in new business. At the same time, new orders grew at the fastest pace in the last six months. Increase in employment and improvement in export demand also strengthened business activities, due to which India’s service sector remains strong.
Further increase in industrial production
India’s Index of Industrial Production (IIP) increased from 4.9% in April to 5.1% in May 2026. This is the highest level in the last five months. This growth was largely contributed by the 5.5% growth in the manufacturing sector and 9.9% growth in electricity and gas supply. Within manufacturing, the major sectors were motor vehicles with a growth of 14.5%, electrical equipment with a growth of 20.8% and basic metals with a growth of 4.6%. At the same time, the production of capital goods increased by 12.9%, which is a sign of continued strength in investment and increase in industrial capacity.
Government’s capital expenditure (Capex) is continuously increasing
In the financial year 2026-27 also, the government has laid special emphasis on capital expenditure. Capital expenditure during April-May 2026 stood at ₹2.51 lakh crore, while in April-May 2025 it was ₹2.21 lakh crore. That means there was an increase of about ₹ 29,650 crore in the first two months alone. This means that the government is spending rapidly on infrastructure projects at the beginning of the year. This is expected to increase demand in sectors like construction, steel, cement, transportation, logistics and equipment.
Big investment on railways
to increase capital expenditure Indian Railways Has played a big role. The Railways spent more than ₹84,000 crore during April-May 2026, which is about 30% of its full-year capital expenditure target. This expenditure is being spent on works like railway safety, signaling system, train protection system, new railway lines, gauge conversion and laying of double lines. Roads, railways, telecom, defense and other infrastructure sectors remain most important in the government’s public investment strategy.
Strong tax collection strengthens economic activities
Despite global uncertainties, tax collection remains strong. Gross Tax Revenue in April-May 2026 was higher than last year, which shows that the government’s income remains strong. in June 2026 GST collection It increased by 13.9% to about ₹1.95 lakh crore, whereas in June 2025 it was ₹1.71 lakh crore. Net direct tax collection increased by 14.64% in the current financial year till June 17 to reach ₹ 5.21 lakh crore. In this, a good increase was recorded from both corporate and non-corporate taxes.
Fiscal discipline expected to continue
Global energy prices and the situation in West Asia definitely created pressure for some time, but softening of crude oil and fertilizer prices is helping the government move forward on the target of fiscal deficit control for the financial year 2026-27.
High-frequency economic indicators also strong
- The number of e-way bills in May increased by 10.9% on an annual basis, which shows that the movement of goods and economic activities are continuously increasing.
- Electricity demand increased from 3.5% in April to 11.2% in May. This indicates a boom in industrial and business activities.
- The movement of goods at ports increased from 2.4% in April to 6.6% in May, which is a sign of increase in trade.
- Vehicle sales remained strong from April to June 2026. 26.11 lakh vehicles were sold in April, which was the biggest April in the history of India’s auto retail market.
- 25.31 lakh vehicles were sold in May, which is an increase of about 10% on an annual basis. Even in June, demand for passenger vehicles, SUVs, electric vehicles (EV), two-wheelers and commercial vehicles remained strong.
- Demand increased in rural areas also. Vehicle sales in rural areas increased by 7.8% in May, which is a sign of the strength of the rural economy.
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