By Dr. Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital

Given the backdrop of global political uncertainties and the recent trend of subdued GDP growth, the government has opted for a cautious approach in its GDP growth projections for FY26. This prudent stance reflects the ongoing challenges posed by international economic turbulence, including geopolitical tensions and trade disruptions, which could dampen global demand and economic stability. Despite these concerns, there are several positive factors that could contribute to a stronger-than-expected performance.

First, food inflation, which has been a key concern in recent times, is expected to moderate. This is largely due to an anticipated improvement in vegetable production and a strong Rabi harvest. A decrease in food prices will help alleviate some pressure on consumer spending, potentially boosting overall economic activity. Furthermore, the government’s increased focus on capital expenditure, aimed at infrastructure development and public sector investment, should also stimulate growth. By directing funds into projects that create jobs and stimulate demand, this fiscal strategy can help sustain momentum in the economy.

On top of these factors, several potential developments could further bolster GDP growth. For instance, any major economic reforms implemented by the government, such as labor market changes or fiscal policy adjustments, could improve business confidence and investment flows. Additionally, the possibility of a US-India trade deal, if materialized, could open up new avenues for trade, technology transfer, and investment, further enhancing economic optimism.

In summary, while the government has projected a conservative outlook for FY26, the combination of favorable agricultural conditions, strategic public investments, and potential reforms or trade agreements presents an opportunity for the economy to outperform expectations, leading to positive surprises on the upside.