PTI New Delhi

India's GDP growth is expected to reach 7.5% or more in the second quarter of the current fiscal, mainly driven by robust festive sales triggered by the GST rate cut in late September, a SBI research report said on Tuesday. Growth is being supported by a pick up in investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, underpinned by structural reforms like GST rationalisation, which also helped unleash a festive spirit that decisively showcased the triumph of hope over hype, it said.

"In the continuum of the good numbers from festive-led sales, the percentage of leading indicators in consumption and demand across agriculture, industry, and services showing acceleration has increased to 83% in Q2 from 70% in Q1. Based on the estimated model, we obtain a nowcast of real GDP growth of about 7.5% in Q2FY26 with the possibility of an upside surprise," said the report by SBI's economic research department. 

The government will release the GDP data for the July-September quarter later this month. The Reserve Bank has projected the economic growth for the second quarter at 7%. The report further said analysis indicates that gross domestic GST collections may come around Rs 1.49 lakh crore for November (returns of October but filed in November), recording an annual growth of 6.8%. 

Coupled with Rs 51,000 crore of IGST and cess on import, the November GST collections thus could cross Rs 2 lakh crore, driven by the peak festive season demand led by lower GST rate and increased compliance, it added.