India&rsquo;s gross domestic product (GDP) growth is likely to improve to 6.7%&nbsp; next fiscal (FY26), a Crisil Intelligence report said on Monday, adding that a sustained decline in food inflation, coupled with soft non-food inflation should create room for a rate cut in the coming months. 
Headline inflation continued making progress towards the central bank&rsquo;s 4%&nbsp; inflation target with food inflation easing for the second consecutive month and non-food inflation stabilising. 
Consumer Price Index inflation cooled to 5.2%&nbsp; from 5.5% in November and food inflation eased to 8.4% from 9%, whereas non-food inflation stayed at 3.1%. &ldquo;Net-net for this fiscal, we expect CPI inflation to average 4.6% with some upside bias to the forecast,&rdquo; said the Crisil report.&nbsp;
The Index of Industrial Production (IIP) picked up to 5.2% in November, from 3.7% in October (revised up from 3.5%).&nbsp;
The increase was driven primarily by outperformance in investment goods and consumer durables, while a low base effect also contributed. 
The National Statistical Office&rsquo;s first advance estimates indicate a growth moderation to 6.4% from 8.2% last fiscal.
&ldquo;Going forward, we expect GDP growth to improve to 6.7% next fiscal in our base case scenario. The Reserve Bank of India rate cuts, lower crude oil prices and a normal monsoon are expected to support growth,&rdquo; said the report.
Agricultural growth is likely to rise as higher reservoir levels also bode well for the rabi output. This should provide a fillip to farm incomes and rural consumption.
Higher agriculture production is likely to ease the pressure on food inflation in the remainder of this fiscal, which will boost discretionary consumption.&nbsp;
&mdash;IANS

Easing inflation and rate cuts to boost India’s GDP growth to 6.7% in FY26

India's GDP Growth to Hit 6.7% in FY26: Crisil

Easing inflation and rate cuts to boost India’s GDP growth to 6.7% in FY26

January 14, 2025 | 09:34 IST