(MENAFN- KNN India) New Delhi, Nov 19 (KNN) State Bank of India (SBI) has released a new research report on India's real Gross Domestic Product (GDP) growth for the July–September quarter (Q2 FY26).

According to the report, GDP is likely to touch 7.5 percent or higher, driven by stronger consumption following the recent Goods and Service Tax (GST) rate cuts. The Reserve Bank of India (RBI) had earlier projected Q2 growth at 7 percent.

“Growth is being supported by a pickup in investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, underpinned by structural reforms like GST rationalisation” said SBI Research in a report

According to SBI's analysis, 83 percent of key consumption and demand indicators showed acceleration in Q2, compared to 70 percent in Q1, reflecting broad-based recovery across agriculture, industry and services.

However, the report cautioned that global commodity volatility and trade disruptions remain downside risks, even as India's near-term outlook remains strong.

SBI Research estimated gross domestic GST collections at Rs 1.49 lakh crore for November 2025 (for October returns), a year-on-year growth of 6.8 percent.

Including Integrated GST (IGST) and import cess of Rs 51,000 crore, total GST revenues could cross Rs 2 lakh crore, driven by festive season consumption and improved compliance.

The report noted a sharp rise in card-based spending during the September–October festive period. Credit card spends surged across categories such as automobiles, electronics, grocery and travel.

On E-commerce platforms, spending went towards utilities and services (38 percent), grocery (17 percent) and travel (9 percent).

Mid-tier cities recorded the strongest growth in card transactions, while metro and urban regions showed strong rise in debit card e-commerce spending.

SBI Research noted most sectors, except textiles, show high consumption elasticity to GST rate reductions, indicating strong consumer response.

Lower GST rates could help households to save around 7 percent per month, based on early analysis using the latest Household Consumption Expenditure Survey data.

All regions reported double-digit growth in car sales, with rural areas leading the expansion.

Urban and metro markets also showed increasing premiumisation, with faster growth in models priced above Rs 20 lakh.

The report said the combined trends in GST collections, spending patterns and vehicle demand confirm that GST rationalisation has delivered a significant consumption boost, contributing to stronger Q2 GDP performance.
(KNN Bureau)

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