New Delhi, Nov 18 (IANS) India’s economic growth is expected to remain strong in the second quarter (Q2 FY26), with GDP likely to be close to 7.5 per cent, a new report said on Tuesday.

The data compiled by SBI Research said that the economy is gaining strength from rising investment activity, improving rural consumption and continued momentum in services and manufacturing.

These trends are being supported by structural reforms such as GST rationalisation, which has not only improved compliance but also boosted festive season demand.

SBI Research noted that more economic indicators are now showing acceleration. Out of 50 leading indicators tracked across agriculture, industry, services and consumption, 83 per cent showed improvement in Q2, compared with 70 per cent in Q1.

Based on its predictive model, the report estimates real GDP growth of 7.5–8 per cent for Q2 FY26, with GVA growth around 8 per cent.

The report also indicates that the broader growth momentum is likely to remain strong in the coming quarters.

The festive season in September and October 2025 played a major role in lifting demand. Lower GST rates and strong e-commerce activity gave a boost to consumer spending.

Data from credit and debit card transactions showed significant growth across categories such as autos, groceries, electronics, home furnishings and travel.

Mid-tier cities saw the strongest rise in spending, while metros led growth in debit card usage on e-commerce platforms.

“Grocery and supermarket items formed the bulk of debit card purchases,” as per the report.

The report found that GST rationalisation has made most major consumption categories highly elastic, meaning consumers responded strongly to lower tax rates.

Only textiles showed low elasticity. SBI Research estimates that a typical Indian consumer may now save around 7 per cent per month on their consumption expenditure, and this benefit could rise further as more data becomes available.

Vehicle sales across India also pointed to strong bottom-up growth. All regions recorded double-digit growth in car sales of around 19 per cent, and rural areas led the expansion.

Nearly 39 per cent of cars sold were priced above Rs 10 lakh, while metros and urban regions showed increasing demand for premium models above Rs 20 lakh.

–IANS

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