New Delhi, Jan. 8 -- The government's 7.4% first advance estimate of real GDP growth in 2025-26 released on Wednesday offers reassurance that India's economy is growing robustly. After 2024-25's 6.5% expansion, this pick-up in pace is noteworthy given the global headwinds we have faced.

The details show that most sectors barring agriculture and utilities, such as services, manufacturing and construction among others, are expected to notch up high single-digit rates.

Our economic picture is thus upbeat. Nominal GDP growth, however, is estimated at 8% in 2025-26, which is significantly below the 10.1% rate assumed for this year's budget. Since tax collections track nominal growth, they could end up lower than projected, which may put the ...