India is on track to achieve real GDP growth of 6.5‑7 % this fiscal year, with nominal growth expected at 11‑12 %, according to Jefferies. The brokerage noted that the economy has performed better than forecasted six months ago, driven by accelerating bank credit and a surge in loans to micro, small and medium enterprises (MSMEs).
Credit growth
Bank credit rose 17.8 % year‑on‑year in July, while MSME lending grew 24.9 %. Credit to industry increased 20 %, services credit grew 22.9 % and corporate lending expanded 21.6 %. The rise in corporate lending signals a potential revival in private‑sector capital expenditure.
Impact on earnings
Jefferies’ Head of India Research, Mahesh Nandurkar, said the acceleration in nominal GDP could lift corporate earnings growth from 14 % this fiscal year to 17 % next fiscal year beginning 1 April.
Domestic demand
GST receipts climbed 14.8 % year‑on‑year in August. Power demand growth accelerated to 9.4 % during April‑August, compared with 1.8 % in January‑March. Residential real‑estate sales in the top seven cities rose 7 % year‑on‑year in the first seven months of the calendar year, versus a 1 % decline in 2025.
Foreign inflows and fiscal stance
The Reserve Bank of India’s scheme attracted USD 136 billion of foreign‑currency deposits from non‑resident Indians. Jefferies highlighted the government's fiscal consolidation, noting a projected deficit of 4.3 % of GDP this fiscal year, with further reductions expected in coming years.