India's economy is expected to grow by 7.1–7.3 per cent in FY 2026–27 and 6.6–7.0 per cent in FY 2027–28, according to Deloitte India's latest economic outlook, which said a sustained revival in private investment would provide an additional source of demand and help build the country's productive capacity.
The report said India's growth over the past decade has been supported by household spending and public investment in infrastructure. However, private investment has taken longer than expected to pick up despite improvements in connectivity, business conditions and corporate balance sheets.
Rumki Majumdar, Chief Economist at Deloitte India, said businesses now have better connectivity, healthier balance sheets and higher capacity utilisation, strengthening the case for expansion.
She said, “Over the past decade, India’s growth has rested on resilient household spending and a sustained push in public infrastructure. Businesses now have better connectivity, healthier balance sheets, and higher capacity utilisation, which are strengthening the case for expansion. The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming year”.
She added that recent indicators offered grounds for optimism, with gross fixed capital formation growing by 11.9 per cent in the first quarter of FY 2026–27, its fastest expansion in four years.
According to the report, capacity utilisation has averaged above 75.7 per cent for six consecutive quarters. As spare capacity declines, companies have a stronger reason to invest in new facilities and equipment.
The report also said credit growth in industry has touched an all-time high of 20 per cent, while micro, small and medium enterprises (MSMEs) are seeing faster growth in credit demand. - ANI
